Commons Sitting of 14 May 1986

Preamble
The House met at half past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  TRADE AND INDUSTRY

    Small and Medium-Sized Firms
    Mr. Brightasked the Secretary of State for Trade and Industry what his Department is doing to improve the export marketing of small and medium-sized British firms.
    The Minister for Trade (Mr. Alan Clark): The services offered by the British Overseas Trade Board provide valuable support for companies' export marketing. About three quarters of those using these services are smaller companies employing fewer than 200 people. The British Overseas Trade Board is currently running a series of conferences on export marketing throughout the United Kingdom, which are designed primarily for smaller companies and those new to exporting.
    Mr. Bright: I welcome my hon. Friend's answer, but will he take it a step further? Bearing in mind that, in the latter half of this year, we shall hold the presidency of the EEC Commission, is it possible to get to grips with a situation in which many firms have to manufacture to different specifications for each European country? As a business man, I know how difficult it is for a small company to do that. What are the prospects of ironing out that problem?
    Mr. Clark: My hon. Friend is right. The essence of the internal market, which consists of 330 million consumers, is that there should be free circulation of goods without artificial impediments. The harmonisation of technical standards is one of the most important of those elements.
    Mr. Meadowcroft: Why does the hon. Gentleman think that tiny companies in Italy—often cottage industries—can manufacture knitwear and other textile products which feed into large units and then into exports, but apparently we cannot cope with such a system here?
    Mr. Clark: That simply constitutes a different approach to marketing. If British manufacturers do not adopt that approach, there must be very good reasons for it.
    Mr. Charles Wardle: Is it not a fact that about 6,000 firms in this country with turnovers of between £1 million and £10 million a year do not export? Does my hon. Friend agree that this presents just the right target for the BOTB's attention?
    Mr. Clark: It is perfectly true that breaking into export markets can be time-consuming and expensive. Many firms may find it more appropriate to wait for customers
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    to come to them, and thus opportunities are lost. The BOTB's initiatives in this respect are extremely valuable. The board holds a number of conferences which are extremely well attended by business men at which it explains what facilities are available.
    Mr. Evans: Why has there been such little progress in the harmonisation of technical standards in the EEC? Is it not a fact that the Europeans can apparently export goods to this country with impunity, but we cannot export to them?
    Mr. Speaker: Order. Is the hon. Member on the right question?
    Mr. Evans: Yes, Mr. Speaker. It is about technical standards.
    Mr. Speaker: Is it about export marketing of small and medium-sized firms?
    Mr. Evans: Yes, Sir. The Minister should answer.
    Mr. Clark rose—
    Mr. Speaker: Order. Mr. Couchman.
    Mr. Couchman: My hon. Friend may care to know that a strong team from my borough of Gillingham has just visited Japan. The team included the chief executive, the leader of the council and people from the enterprise agency and the chamber of commerce. They made valuable contacts, but they were struck by the difficulties faced by firms, especially small companies, in penetrating that market. Is there not a case for the Department to set up a regular and consistent counselling service for small companies so that they gain expertise in this regard?
    Mr. Clark: The British Overseas Trade Board does have such a service. I would very much like my hon. Friend to ask his delegation to communicate with my Department and report on what it found. I am doing my best to build up a picture of the various difficulties and restrictions faced by British exporters to Japan, and the more material that I can have presented the better.
    Mr. John Smith: Will the Minister now kindly answer the question put to him by my hon. Friend the Member for St. Helens, North (Mr. Evans), which was highly relevant to export marketing and technical standards, which, as the Minister should know, is very much at the heart of our potential export success? If he does not know the answer, will he just say so?
    Mr. Clark: It is far too early for the right hon. and learned Gentleman to take this ludicrous and pompous line. He knows perfectly well that if Mr. Speker had wished me to answer that I would have done so. I cannot remember whether the hon. Member for St. Helens, North (Mr. Evans) was even in the Chamber when I answered the question initially. I said that the harmonisation of technical standards was the most important single element in the completion of the internal market.
    Mr. Stokes: In spite of all the help which the Government are at present giving to firms in this country, does my hon. Friend agree that the prime responsibility is for the management of British firms? Firms in my constituency, which export all over the world, do not go to the Government with a begging bowl all the time.
    Mr. Clark: I congratulate the firms in my hon. Friend's constituency. However, I do not think that we are talking about a begging bowl. We are talking about the

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    difficulties that many small firms experience in starting to export on their own account in the first instance. To help them with that, the BOTB is extremely useful.

    Tin Mining Industry
    Mr. Rogersasked the Secretary of State for Trade and Industry if he will make a statement on the latest situation within the tin mining industry.
    The Minister of State, Department of Trade and Industry (Mr. Peter Morrison): The Department has received applications for assistance from Geevor and RTZ. We have already made it clear that we will give urgent consideration to projects designed to make the mines competitive in the new market situation.
    Mr. Rogers: Will the Minister constantly bear in mind the importance of the tin industry to an area which already has severe unemployment and a fragile economy? Will the Government give an undertaking to help that area and the tin industry, and not turn their back on it as they have done with most other British industries, are about to do with the shipbuilders, and as the Minister for Trade did on the question from my hon. Friend the Member for St. Helens, North (Mr. Evans)?
    Mr. Morrison: I can assure the hon. Gentleman that I know the area. I have visited the tin mines and have been down them. I am more than aware of the implications of those tin mines having to close. That is precisely why we are looking very carefully at the applications that have been put to our Department.
    Mr. Harris: Will my hon. Friend accept my thanks for his response to my personal plea that the Government should find some money to enable Geevor's pumps to keep going while the application is being considered? When he considers the application from Geevor and from Carnon Consolidated, will he bear in mind the phrase from the Select Committee on Trade and Industry, when it said that it believed that the Cornish tin industry was worth saving, because the whole of Cornwall believes that as well?
    Mr. Morrison: I am grateful to my hon. Friend for referring to the fact that, with the Cornish county council, we have been able to provide a period of some four weeks to look at the development of Geevor tin mine's application. Certainly my right hon. Friend the Secretary of State and I will bear in mind what the Select Committee said on this important subject.
    Mr. Penhaligon: Does the Minister have any idea how weak his answer to the fundamental question posed appears to those in Cornwall? We recognise that Government decisions sometimes take longer than many of us would desire, but some six and a half months have passed since the crisis started. There have been numerous meetings—I pay homage to the Minister for having the meetings—but no decision has appeared. People in the far south-west are wondering just when the Government expect to reach a conclusion. Can the Minister give us some idea of when he expects the review to be completed?
    Mr. Morrison: With respect, the hon. Gentleman is being less than fair. He will be aware that RTZ put in its application less than two weeks ago. It is impossible to decide whether an application is viable until we receive it and look at it carefully. He should also be aware, after
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    meetings that I have had with the trade unions, that they would want us to look at those applications very carefully and not rush them.
    Mr. Williams: Nevertheless, it is six months since the Minister saw the crisis emerging. How much more governmental dither and indifference must Cornwall suffer? The Government have taken millions of pounds in regional aid from the south-west in the past few years, and plan to take millions more in the next few years. Is it not time that they put some of that money back?
    Mr. Morrison: By the tone of his question, the right hon. Gentleman wants me just to say no without looking very carefully at the viability of the applications. I am looking carefully. I am encouraging the companies to come forward with viable applications. That is what they and the trade unions would want me to do.

    European Regional Development Fund
    Mr. Knoxasked the Secretary of State for Trade and Industry what is the value of the grants allocated to England from the European regional development fund since its inception?
    The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher): About £997 million.
    Mr. Knox: Does my hon. Friend think that the size and extent of those grants has been sufficiently well publicised in this country? If not, what steps does he propose to take to ensure that the public are aware of the level of assistance that we receive from the fund?
    Mr. Butcher: I think that there is awareness among the key clients of that area of expenditure, particularly among local authorities and those who bring forward applications for infrastructure investment. It is the major section of spending under this head of account. Obviously, we would look for methods of improving the publicity, particularly to the private sector applicants, but in the main we are satisfied that the volume of applications is being matched by the funds available.
    Mr. Wrigglesworth: Does the Minister not agree that, in comparison with the scale of funds given out through the common agricultural policy, the funds given out for regional policy by the Community are very small indeed? What are the Government doing to seek to increase them, to help the regions where unemployment is so high?
    Mr. Butcher: I do not think that the amount spent here is ungenerous. I accept the implication of what the hon. Gentleman is saying, that this area of spending has benefits for the United Kingdom which are greater than usual. I should inform the hon. Gentleman that the United Kingdom's share of the fund in 1985 was £345 million, representing about 26 per cent. of the total budget. In terms of applications, in 1986 the United Kingdom's share is about £376 million, which is about 19 per cent.
    Mr. Hill: Will my hon. Friend confirm that applications will be made to the European development fund for the infrastructure that will be needed on this side of the Channel for the Channel tunnel? Is it not a fact that most of the funds seem to be earmarked for infrastructure? Would that not be a good thing?
    Mr. Butcher: In the main, the areas that receive assistance from the fund coincide with our domestically

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    identified assisted areas. My hon. Friend raises a particularly interesting point. The best thing to do at this stage is to agree to look at that, given that it is an especially European—I stress European—venture.
    Mr. Gordon Brown: Is the Minister not aware that, despite the figures he mentioned, regional aid has been halved under this Government, and is to be halved yet again? Was it the EEC that insisted that access to the assisted areas grant be restricted to 35 per cent. of the working population, or was it the Government who made that decision? Will the Minister consider an urgent review of the assisted areas map? Will he bear in mind that 3 million people are now in areas with unemployment rates of between 15 and 26 per cent., yet those areas receive no regional development grants and no regional selective assistance?
    Mr. Butcher: I am grateful for the opportunity to restate the circumstances against which the 35 per cent. area coverage was brought about. During the Government's review of United Kingdom industrial regional aid in 1984, we were given to understand that if we were to seek Commission approval for an assisted area map covering more than 35 per cent. of the working population of Great Britain, the Commission saw little likelihood that it would approve that. Reductions might have been forced upon us to bring the coverage down to 35 per cent., or even less, which was likely. In the circumstances, the Government decided to set the map coverage at 35 per cent., and that was accepted by the Commission.
    Mr. Forth: Has my hon. Friend made any estimate of the likely impact of the enlargement of the EEC to include Spain and Portugal on the United Kindom's share of the regional development fund? Does he agree that to attempt constantly to move economic resources around arbitrarily where they do not want to go is a futile exercise anyway?
    Mr. Butcher: Where possible, these forms of assistance should be coloured by the needs of market forces. I understand my hon. Friend's point, but hon. Members on both sides of the House voted for Portuguese and Spanish accession to the Community, and it was almost inevitable that our share of the budget would fall.

    Cable-producing Industry
    Mr. Tony Lloydasked the Secretary of State for Trade and Industry if he will discuss with relevant manufacturers the future of the United Kingdom cable-producing industry.
    Mr. Peter Morrison: I would be happy to discuss with the industry any specific points it might wish to raise about its future. I am most grateful to the hon. Gentleman for bringing a delegation to see me yesterday.
    Mr. Tony Lloyd: The Minister is aware of the closure by Sterling Greengate Cables of a factory in Trafford park in Manchester and the movement of some of that work to Aldermaston, where unemployment is much less of a problem than it is in the north-west. In his discussions with manufacturers, especially multinationals such as the one to which I referred, will the Minister point out, not only that they have social obligations to areas such as the north-west, but that the Government demand that their investment plans should include a recognition of the geographic dispersion of that investment?
    Mr. Morrison: As I said to the hon. Gentleman when he raised the matter with me yesterday, regional grants are based on precisely the premise that he has advocated. I remind him that my constituency is about 30 miles down the road from Trafford park, which he represents and where many of his constituents work, so I understand his point.
    Mr. Gerald Howarth: Is my hon. Friend aware that the United Kingdom cable industry enjoys an excellent reputation throughout the world? It has contributed substantially to the United Kingdom export drive, but it is deeply worried about the EEC proposals on product liability, which it perceives to be very damaging, and which could assist non-EEC importers.
    Mr. Morrison: I have looked into product liability. I should be happy to be told more about it, but I am assured that it need not be a problem for the industry.
    Mr. Eastham: Do the Government have any strategy for the cable manufacturing industry, or do they intend to leave it to market forces? That would mean that the cheapest markets, irrespective of where they are, would take from Britain this industry, which is valuable and strategically important to it.
    Mr. Morrison: I agree that the industry is important. That is why, in the aid and trade provision, substantial sums go indirectly, if not directly, to the cable industry. The hon. Gentleman is aware that substantial sums have been spent to attract new cable manufacturers to Britain. Only last week I visited a manufacturer in the north-east who was successfully using the most modern methods of production.

    Financial Services (Provision)
    Mr. Sternasked the Secretary of State for Trade and Industry if he is satisfied with the progress towards the harmonisation of the provision of financial services throughout the European Economic Community; and if he will make a statement.
    Mr. Alan Clark: My aim is freedom to offer a diversity of services. Progress towards the full achievement of this objective has been disappointingly slow. I hope it will now quicken, given the high priority attached to it by Community Heads of Government.
    Mr. Stern: Does my hon. Friend agree that one of the greatest barriers to a true market in financial services throughout the EEC is the restrictive practices that exist in so many of those services in Britain and in other EEC countries? Will he bend his efforts towards persuading individual providers of services to reduce those restrictive practices as much as possible?
    Mr. Clark: My hon. Friend makes a valid point. We have already made progress in unit trusts. Recent judgments in the European Court will make it easier to advance in non-life insurance. My right hon. Friend the Chancellor of the Exchequer hopes to carry forward the mortgage credit proposals that will allow building societies to invest in property outside their territory.
    Sir John Farr: What attention is my hon Friend's Department giving to the unfair protection laws that exist in many Community countries, especially in Germany in respect of its domestic insurance markets?
    Mr. Clark: My hon. Friend has identified a market that is proving to be especially difficult. The matter must be agreed in the Council of Ministers. Perhaps when majority voting is introduced it will be easier to make progress in that area.
    Mr. Gould: Will the Minister bear in mind in any harmonisation exercise our unfortunate experience with the EEC listing particulars directive and ensure that any future harmonisation is attuned to the needs of our financial services industry, which is, after all, the most powerful in Europe?
    Mr. Clark: I shall do my best to advance and nurture the interests of our financial services industry, but, as the hon. Gentleman well knows, each Minister will be endeavouring to achieve the best result for his domestic industry and it is that contest which makes these councils sometimes such a labourious business.

    Research and Development
    Mr. Powleyasked the Secretary of State for Trade and Industry how much his Department is spending on support for research and development; and if he will give comparable figures for 1979–80.
    The Minister for Information Technology (Mr. Geoffrey Pattie): My Department plans to spend £415 million in 1986–87 on support for research and development. The comparable figure for 1979–80 was £142 million.
    Mr. Powley: I thank my hon. Friend for that informative answer, but does he agree that the Government have an important and continuing role in research and development alongside industry and commerce? What efforts have been made in the Norwich area in that direction?
    Mr. Pattie: I agree with my hon. Friend. Under the support for innovation scheme, 11 projects worth over £8 million are being supported in the Norwich travel-to-work area with grants of nearly £1·4 million. The technologies supported include electrical engineering, food machinery and printing. One of the largest recipients of DTI support in the area has been Datron Electronics, which manufactures electronic test and measurement equipment. I plan to vist that company in the near future, and I look forward to seeing the results of my Department's support.
    Mr. Lamond: In view of the tremendous success of the A320 Airbus, which managed to achieve 81 definite orders in the first 10 months of last year and employs about 30,000 people in Britain, is there any chance of some of that £405 million being given as a loan as a launch-aid and research and development aid to the A330 and A340?
    Mr. Pattie: The hon. Gentleman is understating the case on the A320, which has already been the subject of launch-aid, because when I checked a few days ago there were about 130 orders with deposits.
    I answered the question about the A330 and A340 on a previous occasion when I said that we await the discussions with British Aerospace and the Airbus consortium, which have yet to decide whether they want to proceed with those projects.
    Mr. Pawsey: I appreciate what my hon. Friend has done for research and development, but what plans has he
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    to encourage industry to do more R and D? Does he agree with mergers, for example between companies such as GEC and Plessey, which would then concentrate resources on research and development, to the benefit of the nation in penetrating export markets abroad?
    Mr. Pattie: I am sure that my hon. Friend would not want me to comment on that particular example when it is still the subject of a reference to the Monopolies and Mergers Commission. It is obviously advantageous to British industry to have certain centres of excellence within industry, and there can be advantages in some companies coming together to provide a scale that will enable them to compete in international markets. We would expect an increase in research in industry to come from an increase in improved profitability, and at present profitability levels are at their highest since 1973.
    Mr. Geoffrey Robinson: Will the Minister confirm, however, that under the important support for innovation scheme funds available have been cut this year and will be cut further next year? Is he aware that the Treasury attitude towards United Kingdom expenditure on research and development in Europe is damaging to British interests? Can he assure the House that United Kingdom contributions to such programmes as EUREKA and ESPRIT in Europe are not being offset by cuts in national United Kingdom programmes in Britain?
    Mr. Pattie: Yes, I can give the hon. Gentleman that assurance, because we have made it clear that EUREKA and ESPRIT programmes will be funded up to what industry regards as satisfactory levels. There is a planned reduction in the support for innovation scheme, because we have increased the provision on awareness programmes, technology transfer programmes, advisory services and industry education, by 25 per cent.

    Commercial Vehicle Industry
    Mr. Dalyellasked the Secretary of State for Trade and Industry what proposals he has for the future of the commercial vehicle industry in Britain.
    Mr. Peter Morrison: The future of this industry, as of others, will be determined by market demand and its ability to compete.
    Mr. Dalyell: What advice would the Minister give to a skilled man from Bathgate who wishes to continue his career somewhere in the British commercial vehicle industry?
    Mr. Morrison: As the hon. Gentleman knows, I am concerned about the position at Bathgate and I have made every possibility—
    Mr. Canavan: Answer the question.
    Mr. Morrison: I will answer the question.
    I have made every possibility available to see whether there are new industries that will come, as has my right hon. and learned Friend the Secretary of State for Scotland. The hon. Gentleman will know that unless the truck industry becomes competitive there will be no truck industry, but there may be opportunities for the person to whom the hon. Gentleman referred at the Leyland Trucks plant.
    Mr. Madel: Will my hon. Friend confirm that one way to secure thousands of jobs in our commercial vehicle

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    industry is to get more American investment? To that end, will he confirm that he is constantly reminding General Motors that more investment by that company in this country, especially in Bedfordshire, is not only beneficial for it, but is very beneficial for us?
    Mr. Morrison: I can certainly confirm that the Bedford plant in Bedfordshire is very important indeed and that, over a long period, General Motors has invested substantial sums in that plant, which, until recently, has provided a healthy and viable industry and livelihoods for many thousands of employees.
    Mr. Hoyle: What discussions did the Secretary of State have with Mr. Robert Stempel of General Motors when they met in New York on 4 May? Did they discuss Bedford and Leyland commercial vehicles? If not, what did they discuss, and will the Secretary of State make a statement?
    Mr. Morrison: I am assured by my right hon. Friend that they did not meet.
    Mr. John Mark Taylor: Is my hon. Friend now reconciled to the fact that the future of Land Rover lies independently of Leyland and, one hopes, in the private sector? Will my hon. Friend encourage the new chief executive of Leyland to look at those possibilities?
    Mr. Morrison: I am not reconciled to any particular facts about Land Rover, but I wish it every success in an expanding market place.
    Mr. Terry Davis: If there are some doubts about jobs at Bedford, would not it he a good idea to consider the possibility of General Motors' van-making operation, which is losing money, being taken over by the the profit-making Freight Rover?
    Mr. Morrison: The hon. Gentleman will recall that he and I visited the Freight Rover plant in his constituency and I hope he recalls that I was impressed by what I saw.
    Mr. Beaumont-Dark: Will my hon. Friend accept that many of us were obliged to the Government for seeing the sense of the argument that Land Rover, as a specialist manufacturer, should stay on its own, but will he also accept that many of us believe that rationalisation of our commercial vehicle industry is important and that most of us who were against the earlier plan would welcome General Motors, through its Bedford subsidiary, having sensible talks with Leyland Truck, so that a viable and prosperous truck industry can survive and thrive in this country?
    Mr. Morrison: It is a welcome exception to get a pat on the back from my hon. Friend in this area, and I am most grateful to him. I am also most interested in my hon. Friend's concern for the future of the truck industry, which, as we have been saying constantly throughout this year, is most important indeed and about which difficult decisions will have to be made.
    Mr. John Smith: Since, as the Minister well knows, from August 1984 until earlier this year the Government had a strategy to dispose of our commercial vehicles industry, or large sections of it, to American interests and that has now collapsed in a shambles, what is the Government's present strategy for the industry? Can the Minister tell us whether any talks are going on or are planned with any foreign interests to acquire any part of the British motor vehicle industry?
    Mr. Morrison: The right hon. and learned Gentleman has been told on several occasions that the Government's strategy is to rationalise, where that is necessary, to ensure that there is a healthy and viable commercial vehicle industry. No talks are taking place.

    Competitiveness
    Mr. Thurnhamasked the Secretary of State for Trade and Industry if he is satisfied with the competitiveness of British industry.
    The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Paul Channon): I welcome the increase in our share of world trade in manufactures last year, and the continuing improvement in our manufacturing productivity, but I cannot be satisfied as long as unit labour costs in manufacturing industry are rising faster in the United Kingdom than in our main competitor countries.
    Mr. Thurnham: Does my right hon. Friend agree that the profit-sharing proposals in the Budget should be of particular benefit to manufacturing and other companies which have to compete in world markets?
    Mr. Channon: Yes, I hope that they will have some effect. I hope that those proposals, which I warmly welcome, will receive a good welcome from both sides of the House.
    Mr. Evans: Does the Secretary of State ackowledge that the competitiveness of British industry would be greatly improved if it were operating on the same basic standards as those of our EEC competitors? Will the Secretary of State answer the question which his hon Friend the Minister for Trade could not or would not answer, as to why has there been so little progress over the harmonisation of technical standards in the EEC and why it is that EEC countries can export to this country, although we cannot, apparently, export to them?
    Mr. Channon: I should like to look at a specific example, because the situation varies from industry to industry. In general terms, I believe that quite a lot of progress is being made on the harmonisation of technical standards. If the hon. Gentleman is saying that it should proceed faster I agree entirely with him, but, alas, that is not entirely within our gift.
    Mr. John Browne: Does my right hon. Friend accept that competitiveness depends crucially upon new products and that that in itself depends upon the birth of new and smaller businesses, which, under this Government, have never enjoyed a better environment? Does my right hon. Friend also accept that, to be truly competitive, our products must be designed properly, built with quality, delivered on time and given adequate after-sales service? Again, does he accept that under this Government the environment has never been better for encouraging competitiveness, particularly because of our firm exchange rate?
    Mr. Channon: I agree entirely with my hon. Friend that the factors he has cited are crucial if British industry is to be more competitive. Immense strides have been made, but I remain worried about unit labour costs, which are extremely important and a major factor.
    Mr. Haynes: When will the Secretary of State and the Government wake up to the fact that we cannot possibly

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    compete against other nations of the world, which receive heavy financial assistance from their Governments? When will this Government stop industry floundering around and collapsing right across the nation? When will they wake up and do something about it?
    Mr. Channon: Most uncharacteristically, the hon. Gentleman exaggerates his case. In fact, the prospects for British industry are extremely good. The forecast for the economy is also extremely good. I look forward with confidence to the progress of British industry during the next few months.
    Mr. Holt: Will my right hon. Friend note that, however competitive the furniture industry may be, it is impossible for it now to compete with the flood of furniture that is being imported from the Eastern bloc? It is undermining a very old and well-established industry in this country. If the Government do not take action, the industry will suffer a serious decline.
    Mr. Channon: If there is evidence of dumping in the furniture industry, I shall be very glad to receive it and to take appropriate action.
    Mr. Gould: Does the Secretary of State accept that the most widely used index of competitiveness, the IMF index of relative normalised unit labour costs, shows a loss of competitiveness since this Government took office of no less than 30 per cent.`? Will he therefore have a word with his right hon. Friends about this? His right hon. and learned Friend the Secretary of State for Scotland is the latest culprit, after his appearance on television last Sunday. All those Ministers constantly, and Wrongly, assert that competitiveness has improved under this Government. Will he give the facts to them so that they cease making false and misleading statements?
    Mr. Channon: We are doing well on productivity and we are doing well in industry. The forecast for the economy is good, GDP is now entering its sixth successive year of growth and investment is at a record high. The Labour party's attempts to diminish these achievements are very misleading and undesirable.
    Mr. Ashdown: Does the Minister recognise that real interest rates in Britain are still higher than in competitor nations? Is he aware that our inflation rate is still the second highest in Europe—ahead only of Italy—and that wage rates here are much higher than in competitor countries? Does he accept that unless he does something more effective—for instance, by joining the European monetary system and imposing more effective wage restraint—[Interruption.]—those three factors will continue to undermine the competitiveness of British industry?
    Mr. Channon: We shall all want to study with care what the hon. Gentleman said in the last part of his question, which did not seem to meet with universal approval. I am interested in the hon. Gentleman's views on wage rates and wage restraint. I hope that we shall soon have good news about inflation. The news on inflation is becoming better and better, and long-term interest rates are at their lowest for 14 years.
    Mr. Roger King: Does my right hon. Friend agree that one way to improve the further competitiveness of British industry is to remove the penal rating which many Labour authorities throughout the country are levying on British
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    industry? According to the Birmingham chamber of commerce and industry, £55 million extra is being spent by industry and 10,000 jobs have been lost. Is it not time that we did something about the rate system?
    Mr. Channon: I agree with my hon. Friend. He is right to draw our attention to the fact that high and excessive rates imposed by Labour councils can cause damage to industry throughout the country.

    National Educational Resouces Information Service
    Mr. Lawlerasked the Secretary of State for Trade and Industry what are the aims and the objectives of the national educational resources information service.
    Mr. Butcher: The national educational resources information service is a computer-based service for schools. It will provide information on educational resource material directly relevant to the school curriculum and is designed to assist teachers. It is interactive and can be accessed by means of a local telephone call.
    As my hon. Friend the Minister for Information Technology announced at the press briefing on 28 April, the service will be available from January 1987. It is being financed for three years by the Department of Trade and Industry.
    Mr. Lawler: I thank my hon. Friend for spelling out the detail on that service, which I am sure will be welcomed by all teachers. To ensure that there is wide usage, can my hon. Friend ensure that individual teachers are told clearly how they can gain access to the information database?
    Mr. Butcher: There is a considerable degree of marketing of the scheme. I know that my hon. Friend takes a close interest in the training of young people and in maximising their chances of finding employment. Provided that schools have a modem attached to their existing or new micro-computers they can gain access to the central database very easily, for the cost of a local telephone call.

    British Leyland
    Mr. Robert Atkinsasked the Secretary of State for Trade and Industry if he will make a further statement on the future of British Leyland's truck and bus divisions.
    Mr. Peter Morrison: A number of possible offers for Leyland Bus are being considered by the BL board and my right hon. Friend expects to receive a recommendation shortly. The position regarding Leyland Trucks is as he announced in his statement on 25 March.
    Mr. Atkins: Is my hon. Friend aware that many of my constituents will this weekend be celebrating the 90th anniversary reunion of the company's activities? What message can I give to them about the uncertainties facing the bus and truck industry so that their future may be resolved and so that I shall be present at their celebration of 100 years?
    Mr. Morrison: If I was not aware as little as five years ago, I have been made perfectly aware by my hon. Friend of the importance of Leyland truck and bus divisions to his constituency. He will appreciate that both bus and truck

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    industries are in difficulties. Difficult decisions will have to be taken. If they are taken correctly, a viable bus and truck industry will be ensured.
    Mr. Campbell-Savours: Will the Leyland National bus plant at Workington survive?
    Mr. Morrison: That depends on what recommendation the BL board makes to my right hon. Friend. I am more than aware from the hon. Member how important an industrial unit is the bus plant in Workington.
    Sir Hector Monro: Will my hon. Friend bear in mind repercussions far afield from the plant at Leyland? Does he realise that an important, modern and small construction engineering plant in my constituency will be gravely at risk if the Workington plant closes? Will he do all that he can, under whatever ownership, to ensure that that plant and others continue satisfactorily into the future?
    Mr. Morrison: I can assure my hon. Friend that when any decisions are made about any part of the vehicle sector, the component suppliers and the implications for their future are taken carefully into account.
    Mr. Park: Does the Minister accept that the continuing uncertainty created in British Leyland by the examination and re-examination of the corporate plan must be overcome as quickly as possible? Is there not now to be another examination under the new chairman, who not only has to pass an opinion on the corporate plan, but first has to inform himself about the industry?
    Mr. Morrison: On the latter point, I have every confidence in what Mr. Graham Day will do as chairman and chief executive of BL. I understand the hon. Gentleman's former point. However, he will know and appreciate that during the period of uncertainty the percentage share of the market for trucks actually went up.
    Mr. Phillip Oppenheim: Is my hon. Friend aware that in 1970 the BL truck division was the largest manufacturer of trucks in the world? Is he further aware that, despite recent advances, it has since declined to become the smallest of the major truck manufacturers in Europe? Therefore, is it not becoming increasingly apparent that the opposition to the Bedford-Land Rover—Leyland merger was opportunist, anachronistic and wholly ill-informed?
    Mr. Morrison: My hon. Friend has put his finger somewhere near the button. I would call it political pot-stirring of the highest order.

    Competition Policy
    Mr. Yeoasked the Secretary of State for Trade and Industry what recent representations he has received regarding competition policy.
    Mr. Channon: I receive regular representations on competition policy from hon. Members and others.
    Mr. Yeo: Is my right hon. Friend aware of the concern about the growing practice of companies which are the subject of competing takeover bids to collaborate, on a rather cosy basis, with the management's preferred suitor to plan a programme of asset disposals, the sole purpose of which is avoidance of a reference to the Monopolies and Mergers Commission?
    Mr. Channon. I am aware of that, and also of the public comment about it. My concern has been to make
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    references primarily on competition grounds. That has been the case since 1984 when my right hon. Friend. now the Chancellor of the Duchy of Lancaster, announced the results of his review. I think that, in general, it is working well, but I shall certainly bear in mind my hon. Friend's point.
    Mr. Flannery: Is not British industry's state of collapse because of its failure to compete due to Government policy? British Shipbuilding is in such a dilemma. Is it not true that money on a grand scale is going from this country into the coffers of our competitors? When the Japanese Government see an aspect of their industry in trouble, do not massive subventions of cash go into that industry to corner the market and flood the world with goods? This Government sit still and let our industry reach a state of collapse.
    Mr. Channon: The hon. Gentleman is not expressing the facts about British industry. As I said earlier, its prospects are extremely good. That is generally recognised both inside and outside the House.
    Mr. Favell: Is my right hon. Friend satisfied with the competitive position of Austin Rover, which during the first four months of this year saw its home market share drop to a disastrous 16 per cent.? Therefore, is it not time to re-open talks with Ford of Great Britain?
    Mr. Channon: No, Sir, I have no plans to do that. However, I understand my hon. Friend's understandable concern about the competitive position of Austin Rover. It has good products coming along and it has made great strides, especially in Europe. I hope that hon. Members have noted the increase in percentages there. I am sure that under Mr. Graham Day and his board every effort will be made to improve the company's position still further.
    Mr. Ryman: This question is about competition policy. Is the Minister really satisfied with the unsatisfactory state of affairs in a number of recent hostile takeover bids? Does he not appreciate that there is complete uncertainty about the attitude of the Director General of Fair Trading as to what bids are or are not referred? The system seems to follow no logical principle to protect the public interest. Was not the most glaring recent example the Distillers-Argyll-Guiness battle, which has baffled experts on both sides?
    Mr. Channon: I make no comment on the last part of the hon. Gentleman's supplementary question. On his general point, I do not think that there is uncertainty in the market. As I have tried to explain to the House—I think that this is well understood outside—references are made primarily on competition grounds. That has been my practice during my short period in office as Secretary of State for Trade and Industry, and that was the practice of my predecessors from 1984.
    Mr. Nelson: In the context of competition policy, will my right hon. Friend consider whether it is desirable that we should have a decreasing number of major joint stock banks? Does he consider it to be in the interests of borrowers, depositors and the public at large that the number should be decreasing and that such major takeovers as are currently proposed—for example, Standard Chartered Bank and Lloyds—should be allowed to go ahead in an untrammelled way?
    Mr. Channon: I note what my hon. Friend says. I do not think that he will expect me to make a comment on a specific case at present, as it is a matter that I may be called upon to decide. I take note, however, of what he says.
    Mr. Wrigglesworth: Does the Secretary of State agree that many of the mergers that have taken place in recent times have been little to the benefit of the work force, customers or the public interest, and have been based largely on the self-aggrandisement of those who own the companies or those making the bids? Does that not illustrate the ineffectiveness of the Government's competition policy? Will he consider changing the basis of it so that those making bids have to prove the benefits that might flow from them?
    Mr. Channon: I should be reluctant to make that change. I do not agree with most of what the hon. Gentleman said in his supplementary question, but I believe that there is a need for certainty and consistent policy. This is an area of policy which is difficult and needs study, and I am considering all aspects of it.

    EUREKA
    Mr. Bellinghamasked the Secretary of State for Trade and Industry what benefits he hopes to accrue to the United Kingdom from the EUREKA initiative.
    Mr. Pattie: EUREKA is benefiting us both by increasing the opportunities for British firms to collaborate with European partners in developing new technology, and by focusing attention on the need for action to open up and integrate the European market.
    Mr. Bellingham: In spite of the unfortunate name, may I congratulate the Government on adapting the initiative to British requirements by turning it into a market-led programme, which should create new and real jobs? Will he do all that he can to ensure that small firms, especially those in Norfolk, are able to benefit from the programme?
    Mr. Pattie: I am grateful to my hon. Friend for his comments. The flexibility of the EUREKA framework allows projects of differing sizes, and small firms with specialist skills are well placed to participate. I am encouraged by the extent to which they have shown interest.
    Mr. Dalyell: Was it not concern about the future of the EUREKA project that partly prompted the gravest doubts on the part of the then Secretary of State for Trade and Industry, the right hon. and learned Member for Richmond, Yorks (Mr. Brittan), which were overcome only when on Thursday 5 December at 9 am he, along with the Secretary of State for Defence, were summoned separately to No. 10 Downing street to be told that if those doubts were not overcome they could like it, lump it or go? Was that not the truth of the situation?
    Mr. Pattie: I have not the faintest idea what the hon. Gentleman is talking about.

    Manufactured Goods
    Mr. Canavanasked the Secretary of State for Trade and Industry what is the latest balance of trade in manufactured goods.
    Mr. Alan Clark: In the first quarter of this year there was a deficit of £1·4 billion.
    Mr. Canavan: How can the Government claim that their economic policies are a success when they have been responsible for the worst manufacturing trade deficit in British history? Bearing in mind that the deficit has existed continuously since the 1983 general election, will the Minister admit that we shall probably never see a manufacturing trade surplus again until this incompetent Tory Government are replaced at the next general election by a Labour Government who are committed to industrial regeneration and the growth of exports?
    Mr. Clark: I am just as anxious as the hon. Gentleman to see a manufacturing trade surplus. The wealth of a nation is measured by its gross domestic product, which is composed of many different elements. The hon. Gentleman's supplementary question does less than service to our manufacturers, whose exports in 1985, both by volume and by value, were higher than ever before.
    Mr. Teddy Taylor: Does my hon. Friend share my alarm at the fact that the deficit in trade with the EEC in the first quarter of the year, at £2·8 billion, was the highest ever recorded and is equivalent to almost 1 million job losses? Why do we find it so difficult to make good trading arrangements with the Common Market as compared with the rest of the world?
    Mr. Clark: My understanding is that the exceptionally high deficit in the first quarter of this year reflects trade in the more erratic items.
    Mr. Pike: When will the Government realise that we shall never solve the country's financial problems until we get our trade in manufactured goods back into surplus? When will they realise that people in the north-west, who depend heavily on manufacturing industries, will never be got back to work unless the Government change direction and get our manufacturing industries back into surplus?
    Mr. Clark: Trade in manufactures is but one element in the overall picture of trade. The overall surplus reflects revenues from oil, a surplus in services and the money from increasing manufactured goods and exports. We spend on imports of intermediate goods to fuel growth. on capital goods to invest for the future and on consumer goods to enhance freedom of choice.
    Mr. Nicholas Winterton: Does my hon. Friend agree that his original answer was somewhat disappointing to those of us on the Tory side of the House who feel that genuine wealth is created by manufacturing industry and that it is upon manufacturing industry that service industries depend? In view of the somewhat unsatisfactory results in the by-elections and local government elections last week, will my hon. Friend prevail on our right hon. Friend the Secretary of State for Trade and Industry and on Treasury Ministers to give manufacturing the emphasis and priority which it deserves, to stand up for British manufacturing industry in the arenas of the world and to provide fair rather than unfair competition?
    Mr. Clark: My hon. Friend is entirely right. It is a principal objective of the Government and this Department to ensure fair conditions of trading. In fair conditions, I am confident that, provided British manufactures are competitive—much of their decline, it must be admitted, rests in that they have lost competitive quality in several respects—they will advance. As I told the hon. Member for Falkirk, West (Mr. Canavan), manufacturing exports increased by 5·5 per cent. last year.
    Mr. John Smith: Is the Minister aware how serious it is that, in the first quarter of 1986, we have had a balance of trade deficit on manufactured goods as high as £1·4 billion? What do the Government intend to do to reduce our balance of trade deficit in manufactured goods, bearing in mind that, as the oil balance deteriorates, it will become a much more serious problem? Why, if the so-called erratic items were so important, was no reference made to them when the trade figures were published, or is this the hon. Gentleman taking a semi-detached view of the matter?
    Mr. Clark: I do not think that it was thought necessary to make any special reference to what were only exceptional figures for one quarter.

    Support for Marketing Initiative
    Mr. Richard Pageasked the Secretary of State for Trade and Industry if he will make a statement on his Department's Support for Marketing initiative.
    Mr. Butcher: This new advisory service will be introduced by the Department later this year. It is intended to assist and encourage small and medium-sized firms to develop or improve their marketing strategies by offering financial assistance for up to 15 man days' expert consultancy in this important area of their operations.
    Mr. Page: I am grateful to my hon. Friend for that reply. Does he agree with the old adage which runs, "If you don't tell you don't sell"? What reassurances can he and the Government give that the new initiative will not suffer from the shortage of funds which has unfortunately affected the business and technical advisory service?
    Mr. Butcher: Some of Britain's critics have sometimes said that, although we might be excellent at developing products, we are perhaps not so good at marketing them. The scheme is a response to those who requested an enhancement of training and consultancy, especially small and medium-sized companies. I understand that success has caused the problem of queues in the business and technical advisory service, especially as we have multiplied by five times the amount of money
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    that is spent on that general scheme during the past four years. I take my hon. Friend's point. We shall act to ensure that the queues are shortened.

    Companies (Political Funds)
    Mr Winnickasked the Secretary of State for Trade and Industry if he will introduce legislation that would require companies to ballot their shareholders on whether a political fund should be established to make political donations.
    Mr. Channon: No, Sir.
    Mr. Winnick: As the Government were so insistent that trade unions should have to ballot their members every 10 years about whether a political fund should be established or maintained, why should the same not apply to companies? Is the Minister aware that a recent MORI poll found that 82 per cent. of the people surveyed believe that companies should be treated in the same way as trade unions? Did the Minister say no simply because the bulk of the money goes from companies to the Tory party and its front organisations?
    Mr Channon: No. The hon. Gentleman knows perfectly well that there are completely different factors relating to trade unions and companies. Shareholders have complete freedom of choice to invest their money, but many trade union members have no choice, and, even now, are forced to join a union to get a job. Moreover, we all know how misleading the trade union campaign was on political fund ballots. The two matters are not in any way analogues, and it would be wrong to legislate.
    Mr. Sumberg: Is it not a fact that every company must have an annual general meeting, and that at that meeting the shareholders can accept or reject the donations? The fact that they rarely, if ever, do, proves that British industry and shareholders want a Conservative Government returned at the general election because they know that if the Opposition were returned it would be a disaster.
    Mr. Channon: I agree with my hon. Friend, and I am glad that British industry shows that common sense.

British Shipbuilders
3.30 pm
The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Paul Channon): With permission, Mr. Speaker, I should like to make a statement.
As the House will know, British Shipbuilders won only 23,000 compensated gross tonnes of orders last year. This was little more than a tenth of the amount forecast in its corporate plan. This was not for lack of Government support. The financial support for individual orders is not the problem. The problem is that orders are simply not there to be won. In Sweden, for example, which a few years ago had one of the most modern merchant shipbuilding industries in the world, the entire industry is closing down. This reflects the latest downturn in the shipbuilding market, which has resulted in capacity reductions and redundancies across the world. Despite Government support of over £1,400 million since 1979 and the recent increase in the level of support for new orders, it has proved impossible for British Shipbuilders to maintain its current capacity in the absence of new orders.
British Shipbuilders has, therefore, today announced measures which deal with this over-capacity. They include a decision to close by the end of the year, Smith's Dock, the Troon shipyard of Ferguson-Ailsa, and the Wallsend site of Clark Kincaid. In addition, British Shipbuilders has, as part of its wage negotiations, proposed a two-year deal which will seek to match manpower and capacity more closely to demand. The Government regret that these necessary measures will lead to total redundancies of some 3,500 people by March 1987. British Shipbuilders hopes that a substantial number of these will be achieved by voluntary redundancy.
The Government propose to provide British Shipbuilders with immediate support of up to £5 million in the current financial year to enable it to set up a new subsidiary, British Shipbuilders Enterprise Ltd. This will provide expert and practical services for those facing redundancy. It will ensure that they have at their workplace counsellors with the skills and resources to guide them towards retraining and redeployment opportunities, and to provide financial support to take advantage of those opportunities. It will also offer financial help and advice to those wishing to take the initiative of setting up their own businesses.
In addition, my right hon. Friend the Secretary of State for Employment has asked the Manpower Services Commission to provide a further £1 million specifically for the retraining of redundant employees of British Shipbuilders in direct co-operation with the new enterprise corporation. He will also make available £1 million via the City Action Team for job creation measures and to stimulate enterprise in the north-east.
The community programme is already being expanded in the north-east from its present level of 22,000 jobs to 29,000 jobs at an extra cost of some £30 million. My right hon. Friend has asked the Manpower Services Commission to explore urgently new ways in which the resources of the community programme and the enterprise allowance scheme can be used in order to lead to permanent jobs in the north-east.
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In addition to these measures, my right hon. Friend the Secretary of State for the Environment has reviewed the derelict land reclamation and urban programmes in the areas affected—[Interruption.] I had thought that this matter was of some interest to the north-east.
At £13 million, the reclamation programme in the north-east region this year is already substantial, but it will be increased by a further £1 million. My right hon. Friend the Secretary of State also proposes to allocate an extra £2 million under the urban programme, adding to the region's £35 million programme this year. British Shipbuilders Enterprise Ltd. will also operate in Scotland. My right hon. and learned Friend the Secretary of State for Scotland will consider urgently additional measures to help the areas affected by the redundancies announced today.
The measures that I have outlined will be in addition to the existing regional aid programmes, including assistance via English Industrial Estates for which the areas concerned are already eligible.
Mr. John Smith: Is the Secretary of State aware that the chilling and desperate news contained in that statement will cause not only dismay but deep anger throughout the shipbuilding areas? Is he not ashamed to come to the House to announce 3,500 redundancies? Why did he not tell us about redundancies in particular yards—[Interruption.] Conservative Members may not like it, but they will have to listen to it. Why did the Secretary of State not tell the House that there would be 495 redundancies at Govan Shipbuilders? Why did he not tell us that there would be more than 900 redundancies at Austin and Pickersgill, and Sunderland Shipbuilders? Why was that information not given to the House? Was he ashamed to give the details?
Is the Secretary of State aware that the collection of small sums which he has offered to the House in a desperate passing of the hat around Government Departments amounts to no more than putting tiny pieces of sticking plaster over gaping wounds? Is he aware that that money is just a pittance compared with the tens of millions of pounds taken away from those areas by the halving of regional development grants in the past few years? Does the right hon. Gentleman not now think that the decision to hive off and sell the naval shipyards, thus breaking up the integrated nature of the British shipbuilding industry, was, as a former chairman declared this morning, a "national disgrace"?
The Secretary of State spoke about the Government having helped, but why did they not intervene to ensure that British Nuclear Fuels plc, in whose company they were the majority shareholder, ordered the fifth nuclear carrier from British shipyards just like the previous four had been ordered, instead of allowing the order to go to Japan? Why do the Government not have a programme of bringing forward public sector orders to ensure that ships that will need to be built some day are built now, while our shipbuiding industry is still capable of building them? Why do the Government not urgently reassess the systems and packages of support so that British Shipbuilders has as good a package of support as any other shipbuilding firm in the world?
Why do the Government not set up a special task force, charged with the job of ensuring that our British shipbuilding industry survives? It is clear that in 1986

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British merchant shipbuilding will either survive or disappear. On the evidence so far, the Government are completely indifferent as to which.
Mr. Channon: The right hon. and learned Gentleman is wrong on almost all points. I do not think that British shipbuilding is on the verge of disappearing. It is important that we should try to take the necessary steps to keep merchant shipbuilding going in this country. The right hon. and learned Gentleman asked about public sector orders. Some are expected soon, including a fisheries protection vessel and two small ferries for Scotland, for which both British Shipbuilders and other British private sector yards are tendering.
The House must understand that further public sector orders cannot be conjured out of thin air if there is no need for them. The right hon. and learned Gentleman is misleading the House and the country if he imagines that there is some pool of public sector orders that are desperately needed and that can easily be brought forward. That is not the case. He would also mislead the House if he were to give the impression that this is a British problem; it is a worldwide problem. If the House wants details of the redundancy figures I gave, I can simplify them, but I have already told the House the unfortunate total of redundancies.s
As to our subsidies being competitive, as a whole, subsidies available to British Shipbuilders match those available elsewhere. It is quite misleading to make comparisons of the credit available without comparing direct production subsidies. It is essential that we do our best to help the industry. It is not good enough for the right hon. and learned Gentleman to misrepresent the position that exists all over the world.
Mr. Neville Trotter: Does my right hon. Friend agree that it is not a money problem but a worldwide problem? There is throughout a lack of shipbuilding orders caused by the calamitous state of the shipping industry worldwide. I welcome the palliatives which my right hon. Friend has announced and offer my congratulations regarding the British Shipbuilders enterprise corporation. Does my right hon. Friend accept that it is essential that this country continues to have a merchant shipping capability? We must continue to have some fundamental level of shipbuilding capability. Will my right hon. Friend confirm that we must maintain research and development facilities in British Shipbuilders, because the future lies in specialist and complicated vessels?
Mr. Channon: Yes, I agree. As my hon. Friend said in the second part of his question, it is important that facilities for research and the appropriate technology are both available. My hon. Friend said that it is a worldwide problem. I have already cited the example of Sweden. I shall cite also the example of Japan. For nearly 10 years, the Japanese have had to cut capacity. They are now considering reductions of one third in the larger yards. They have already laid off 10,000 people. To give the impression that it is solely a British problem is wholly misleading.
Mr. Bruce Millan: Is the Minister aware that there are orders available in the world, that 13 million tons of orders were placed worldwide last year, and that we won orders for only 20,000 CGT? The orders are there and we are not getting them. [HON . MEMBERS:
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Why not?] Why do not the Government spend money on helping us to get orders instead of spending it to pick up the pieces of unemployment? Is the Minister aware that Govan Shipbuilders, which has suffered 500 redundancies today, is interested in orders from China for container ships and in a ferry order? However, it can get those orders only if there is a sufficient package of Government support. That is what we are asking for today.
Mr. Channon: The right hon. Gentleman's point about Chinese container ships is entirely right. We are prepared to offer the appropriate amount of mixed credit to make that possible. The House must understand that, in trying to get orders, it is not just a question of subsidy. There is a desperate shortage of orders worldwide. The United Kingdom is offering the same sort of credit as other countries offer—fully competitive packages. British Shipbuilders is doing its best to win the orders. One does it a disservice by demeaning what it is trying to do.
Mr. Tony Speller: I refer my right hon. Friend to the Appledore shipyard in north Devon, which is in the constituency of my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills), who is absent today due to sickness. Workers at that shipyard live both in my hon. Friend's constituency and in my constituency of Devon, North. Although 650 workers may seem a small number, their redundancies will be a huge, catastrophic occurrence for our area. On the subject of reviewing the boundaries of regional aid and access to European funds, does my right hon. Friend agree that the time to take action is now rather than delay further while matters get worse?
Mr. Channon: I shall certainly consider what my hon. Friend has said, although the question of where the boundaries should be drawn raises difficult problems. I hope that the effect in Appledore will not be too severe.
Mr. Ian Wrigglesworth: Does the Secretary of State accept that we are seeing a decimation of our shipbuilding industry? If it is a worldwide problem, why has the Conservative party, since it came to office in 1979, done little to work with other Governments to stimulate world trade and to increase the demand for shipping? If the industry has been facing massive problems, why have the Government deflected it from the major market, construction and manufacturing problems facing it with the re-organisation and the privatisation programme?
As for the north, especially in the Cleveland area where Smith's Dock is to be closed, will the right hon. Gentleman give an assurance, in addition to the ad hoc measures which he has mentioned, that he will support financially the proposal by the Northern CBI, the Northern TUC and others for a northern development company?
Mr. Channon: I shall of course consider the hon. Gentleman's last point. He must face up to the fact that this is a problem of the shipbuilding industry not only in Britain but all over the world. The hon. Gentleman implied that the Government had neglected shipbuilding. I have already told the House that, since 1979, there has been Government support of more than £1·4 billion. If that is neglect, I should like to know what is not.
Mr. James Tinn: Is the right hon. Gentleman aware that, in the 20-odd. years in which I have been a Member, I have watched with admiration the first-class work of the men and management at Smith's Dock in my

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constituency? Their achievements were confirmed as recently as last November in a letter from Graham Day, the then chairman of British Shipbuilders, in which he discounted rumours of future closures. Does the right hon. Gentleman agree that this announcement is a shabby return for all their sterling work? Does he agree that the ameliorative measures which have been announced amount to little more than a contribution to the funeral expenses of an important sector of the British shipbuilding industry? If reports that the Cubans are looking for four or five vessels—depending on the finance available—are correct, will the right hon. Gentleman see to it that British yards are able successfully to tender for them?
Mr. Channon: I understand and sympathise very much with the hon. Gentleman's comments. I recognise his understandable feelings at this difficult time. I do not think that any Cuban orders have yet been won. Negotiations are taking place, but I do not want to be drawn into the details. It would obviously be a great help to British Shipbuilders and yards in the United Kingdom if they won the Cuban orders. I shall certainly bear in mind the hon. Gentleman's points.
Mr. Piers Merchant: Does my right hon. Friend agree that this problem has been brought about not because of Government dereliction but because of the world crisis in shipbuilding—a crisis which he has faced up to with positive courage? Does my right hon. Friend agree that his package of nearly £10 million of extra aid will be widely welcomed in the northeast? Will he consider appointing a Minister to oversee the way in which that money is spent so that it does not fall into the hands of unaccountable and unelected organisations?
Mr. Channon: I am grateful for my hon. Friend's comments about the assistance that the Government hope to give in the affected areas. It is not for me to appoint a Minister to undertake that task. However, I am sure that we shall have to devise effective ways of ensuring that the money is spent in the best possible way to help in this difficult situation.
Mr. James Callaghan: Does the Minister appreciate that many of us believe that it is an act of folly for an island—not Sweden—which imports and exports 90 per cent. of its trade to allow its shipbuilding industry to be almost destroyed? Whether or not orders are there to be won—the right hon. Gentleman says that they are not and, of course, we must accept that—do the Government believe that it is essential to preserve a viable shipbuilding industry of considerable size? If it is necessary to adopt a scrap-and-build policy, as was done earlier, to meet the needs of a temporary problem, why not do that? What are the right hon. Gentleman's comments on the national position of our shipbuilding industry?
Mr. Channon: I understand, and to some extent share, the right hon. Gentleman's view. It is extremely important that we have a merchant shipbuilding industry. I think that the right hon. Gentleman will pay me credit for trying to achieve a situation in which the industry is viable.
I am afraid that if British Shipbuilders keeps everything open the industry's financial position will worsen, not improve.
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I believe that the merchant shipbuilding industry is in a position to survive and will survive. I do not believe that the scrap-and-build process that the right hon. Gentleman has advocated was a success, but obviously we are considering every step that can be taken.
Sir Hector Monro: Does my right hon. Friend agree that this lack of orders has caused a serious situation in Scotland, especially at Govan Shipbuilders and the Ferguson-Ailsa yard at Troon? Will he say a little more about how the British Shipbuilders enterprise corporation money will be shared out? Will there be adequate allocations for Scotland? Will there be discussions with the Scottish Development Agency, taking into account the successful work of the British steel industry in similar circumstances, which has brought many valuable jobs to the west of Scotland?
Mr. Channon: I think that I can give all those assurances to my hon. Friend. The British Shipbuilders enterprise corporation will operate in Scotland. My right hon. and learned Friend the Secretary of State for Scotland is considering additional measures, and I shall ensure that everything that my hon. Friend has said is drawn to his attention.
Mr. Frank Field: Does the Secretary of State accept that the House will be perplexed that not one of the new initiatives announced today will save shipbuilding jobs? Does he accept that merchant shipbuilding is on the point of collapse? If so, what new measures does he intend to announce today?
Mr. Channon: I do not accept that it is on the verge of collapse. It is an extremely difficult situation, which is why these measures have to be taken. Further yards remain, and I very much hope that they will survive.
Sir David Price: Does my right hon. Friend accept that his depressing statement is a logical consequence of the very rapid decline in the British merchant fleet, about which the Government have been warned consistently from both sides of the House, especially by my right hon. Friend the Member for Taunton (Sir E. du Cann) and myself? Even at this late hour, will my right hon. Friend and the Government take some of the measures taken by other countries to support their merchant navies? If we support the merchant navy we may get some orders for our shipbuilders.
Mr. Channon: I certainly take note of my hon. Friend's point. I shall discuss it with my right hon. Friend the Secretary of State for Transport.
Mr. Don Dixon: Does the Secretary of State realise that what he has just announced means 3,500 highly skilled men going on the streets? A few community jobs and derelict land schemes will not save the valuable skills of this maritime nation. When will the Minister take some notice of what has been said by the Oppositon since 1979 about the decline in merchant shipping and the British shipbuilding industry? When will he come forward with something constructive? What he has announced today will do nothing for the British shipbuilding industry.
Mr. Channon: I have been trying to announce steps that will help the difficult position faced by the House and the shipbuilding industry. It is a serious situation, as the hon. Gentleman knows better than anybody. He also knows better than anybody that the problems facing the

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shipbuilding industry are worldwide and not confined to Britain. Such problems are faced by many countries and they have taken similar steps. It is foolish, misleading and unfair to suggest that we could take steps to get out of this position when other countries have not been able to.
Mr. Richard Holt: Although I accept that today's announcement is the accumulation of years of neglect and the lack of orders, does my right hon. Friend accept that the closure of Smith's Dock in Langbaurgh, with the current high level of unemployment, will be much worse than anywhere else in the country? Therefore, will he take whatever steps he can, and say whether the £5 million he has announced is a limited figure or whether, once that has been used, further moneys will be made available? What steps will be taken to assist those people who would like to relocate to areas where work is available from an area where the house prices are the lowest in the country? Any form of help will be most welcome to my constituents.
Mr. Channon: I understand my hon. Friend's views. I hope that the amount of money announced today will be sufficient, but, of course, we shall keep the matter continually under review.
Mr. David Lambie: Is the Minister aware that the decision by British Shipbuilders to close the Ferguson-Ailsa yard at Troon, making 350 people redundant in this already high unemployment black spot, will increase male unemployment to nearly 40 per cent. and will put the final nail in the political coffin of the Secretary of State for Defence, who represents that area? Will the Minister consult the Secretary of State for Scotland to see whether the present orders for two ferries for the Scottish sea routes and one replacement vessel for the fisheries protection fleet that the Minister spoke of today can be directed to Ferguson-Ailsa in order to keep the yard open and ensure the future of the Port Glasgow and Troon shipyards?
Mr. Channon: I shall not comment on what the hon. Gentleman said in the first half of his question. As to the second half, the orders will have to go out to tender and competition in the normal way. A great many yards would like to have those orders.
Mr. Teddy Taylor: As shipbuilding is a cyclical industry, will the Minister take steps to preserve the facilities at Smith's Dock and Ferguson-Ailsa for a possible recovery? Can he understand the feelings of those who work in shipbuilding, as I did before coming to the House, who are just a bit sick when we see that the total amount of cash provided for next year is equivalent to what we are paying every four days to subsidise agriculture and produce items that nobody wants because there is acute world over-capacity?
Mr. Channon: That may well be so, but surely my hon. Friend agrees that this is not so much a cash as an orders problem. There is a lack of orders for ships all over the world, including this country. That is well understood.
Mr. Taylor: Who wants to buy agriculture?
Mr. Channon: My hon. Friend talks about this being a cyclical industry. All the forecasts that I have seen remain extremely gloomy about the industry for a long time.
Dr. Norman A. Godman: In the light of the decision to close the Troon yard of Ferguson-Ailsa, may I point out to the Secretary of State that it is absolutely crucial that the fisheries protection vessel to be ordered by the Department of Agriculture and Fisheries for Scotland and the Caledonian MacBrayne passenger ferry come to Ferguson-Ailsa in Port Glasgow, or the firm will disappear altogether? Has the right hon. Gentleman's Department informed the Associated Container Line that assistance can be obtained for the enlargement of its four vessels by way of the home credit scheme? There are orders there if the right hon. Gentleman's Department gets to its feet and helps British Shipbuilders to look for them.
Mr. Channon: On the hon. Gentleman's final point, that is well known, but I shall have to have that matter specially looked at. On his first point about the fisheries protection vessel and the ferries, it will be extremely important which yards those orders go to. British Shipbuilders and other yards are tendering for them now. I think that the only fair thing is for them to go out to tender in the normal way.
Mr. Jonathan Sayeed: Is it not the depressing reality that there are too many modern ships chasing too little cargo and that, consequently, freight rates are at an historic low? That means that there is too little money to invest in new ships and too little incentive to do so. Is my right hon. Friend aware that many ships that are being built now will be laid up as soon as they emerge from the yards?
Mr. Channon: My hon. Friend shows graphically the real problems that face shipping and the shipbuilding industry—[Interruption.]
Mr. Speaker: Order. I must say to the hon. Member for Bolsover (Mr. Skinner) that none of what he is saying is going into Hansard, so it does not help us.
Mr. Nicholas Brown: Why did the Secretary of State fail to announce in his statement any support for the present shipbuilding industry? Is he aware that it would take four Nissans in the north-east of England to make up for the shortfall of jobs that he announced today? Why cannot our community have the protection that the Government seem so willing to afford Harland and Wolff in Northern Ireland?
Mr. Channon: The hon. Gentleman is being unfair. I have said that there has been Government support of more than £1,400 million since 1979. The problem now is a lack of orders all over the world. In that difficult situation, I hope that the package that I have announced will create jobs, and be of help in the north-east and in Scotland.
Mr. Ralph Howell: Is my right hon. Friend aware that public expenditure in South Korea accounts for 20 per cent. of GDP and that in this country it is 45 per cent.? South Korea has a thriving shipbuilding industry while ours is in a shambles. Will my right hon. Friend make that point to those of his right hon. Friends who want to increase public expenditure?
Mr. Channon: Yes, I will certainly make that point to my right hon. and hon. Friends. My hon. Friend must also be aware that the Korean industry is by no means in as good a shape as it was.
Mr. Robert C. Brown: Is the Minister aware that it is not true to say that there are no orders? The problem lies in the fact that for every 700,000 tonnes of world orders last year, the British industry received only 1,000 tonnes. There must be a message in that for the Minister who is responsible for the industry. The right hon. Gentleman has been less than truthful with the House and has told only half the truth. He has not mentioned the other half of the British shipbuilding industry, which is in private hands. He did not mention, for instance, that the 3,500 job losses that he has announced today will be further increased by 2,000 losses when Swan Hunter announces redundancies on the Tyne as a direct result of the Government's failure to give a shipbuilding order.
The former hon. Member for Tynemouth, the late Dame Irene Ward, must be turning in her grave after hearing the contribution of her successor today. Like her successor, the hon. Member for Tynemouth (Mr. Trotter), we can also afford to ignore the hon. Member for Newcastle upon Tyne, Central (Mr. Merchant) because he will be a goner at the next election.
Mr. Channon: I think that the House will know that special steps have been taken in an attempt to help Swan Hunter in relation to the auxiliary oiler replenishment vessel. I am acutely aware of the problem faced by Swan Hunter. Of course, there are some orders available, and the hon. Gentleman was correct about that. However, there are many fewer orders than there were, and I believe that every shipbuilding industry in the world is cutting back.
Mr. Richard Page: Does my right hon. Friend accept that I know that he and the House regret the necessity of having to make this statement? Does he have any idea how much money would be needed, in addition to the £1·5 billion already given, to secure the shrinking world orders that are available? Is he also aware that National Coal Board (Enterprise) Ltd., which was so denigrated by the Opposition, has created thousands of jobs and would he agree that British Shipbuilders Enterprise Ltd. will do the same?
Mr. Channon: I entirely agree with my hon. Friend. The coal and steel enterprise companies have created thousands of jobs and I very much hope that British Shipbuilders Enterprise Ltd. will receive a welcome from both sides of the House and will be successful. I suspect, as I have told the House, that it is not a question of money, Government support or more subsidy. Such assistance would make little difference to British shipbuilders. There are very few orders available and those that are will not be given away. The House is misleading itself if it imagines that there is a simple solution.
Mr. Bob Clay: Is the Minister aware that workers at Austin and Pickersgill, the Sunderland shipbuilders, will take it as a sign of the Minister's indifference to their position that he could not be bothered to mention in his statement the 925 redundancies that were announced in Newcastle this morning? Is it not true that, unless the Minister changes his careless and complacent attitude, he will be back before the summer recess to announce that another one third of the industry has gone under? Is it not also true that the whole industry will disappear by the end of this year or early next year? Does the Minister accept that it is not
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true that there are no orders? Hon. Members have referred to orders from China and Cuba, and Yugoslavia is tendering for 23 ships abroad. Is Britain incapable of getting even five or six of these ships? It would appear that we are incapable under this Government. Will the Minister not tear up the appalling and shameful statement and get off his backside and do what Opposition Members have for long enough requested him to do?
Mr. Channon: I have already explained the position in relation to the China and Cuba orders. We are doing our utmost to win them, and the Government are helping to the maximum extent—[HON. MEMBERS: "What is the right hon. Gentleman doing?"] We are helping through the aid and trade provisions in terms of the China order, and talks are continuing about the Cuban orders.
On the hon. Gentleman's specific point about Sunderland, the figure that the hon. Gentleman referred to was included in the total number of redundancies that I announced in my statement.
Sir Kenneth Lewis: Is my right hon. Friend aware that only a year or two ago—in the lifetime of this and the previous Administration—manufacturing industry was going out at a rate of knots? There is now an upturn in the demand for manufacturing goods and we do not have the capacity to provide for the market. Will my right hon. Friend therefore accept that I am more optimistic than he that in a year or two from now there might be a demand for shipping if world trade improves? Will he ensure that he keeps some of the units available and does not close them altogether so that they can be used again when there is an increase in shipping demand?
Mr. Channon: In general, my hon. Friend is right about the opportunities and prospects for British industry in the coming year. Some industries are still facing serious problems, and the shipbuilding industry is perhaps suffering most. I wish I could be as optimistic as my hon. Friend about the prospects for the shipbuilding industry worldwide, but I will certainly consider his remarks.
Mr. Robert Litherland: Does the Minister agree with the former chairman of British Shipbuilders that the position now is so serious that the Prime Minister should intervene? Will she do that?
Mr. Channon: I heard what the former chairman said, but I agreed with very little of it.
Mr. Charles Wardle: Did my right hon. Friend see a report that was published last month which revealed that there is surplus capacity worldwide of 60 million tonnes in the bulk carrier market and 100 million tonnes in the tanker market? Against such a background is it any wonder that there is no demand for new ships?
Mr. Channon: My hon. Friend is quite right and the House must consider the points that he made. There is a worldwide problem and it would be foolish to imagine that any Government can take steps in isolation to cure the problem. If the Opposition were responsible, they would not take the line that they are adopting now.
Mr. James Wallace: Does the Secretary of State really believe that the Government's dogmatic obsession with reorganisation and privatisation has been helpful to the shipbuilding industry? At such a

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critical time the Government should have been concentrating their efforts on marketing and chasing orders. Rather than coming to the House to announce a rather puny welfare package, does the Secretary of State not accept that the communities in the north-east and in Scotland are looking for a package for industrial regeneration?
Mr. Channon: I do not agree that the privatisation of the warship yards has had an effect on the position. The orders required by both sets of yards are quite different. That is not to say that there are not serious problems in warship yards as well.
Mr. Tam Dalyell: When my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan) raised the question of scrap and build, the Minister said that he had some sympathy with that. If so, will he consider orders for the four much-needed ocean survey ships which will he successors to the clapped out Heckla and Hecate? Will he consider successors to the Uganda? The Uganda was used during the Falklands war, and there is now no educational cruise ship available. Would it not be sensible to consider a viable scheme involving educational cruise ships? Such a scheme worked properly until the Uganda was taken over to be used as a hospital ship. If the need ever rose again, where would we find a hospital ship for an operation similar to the Falklands campaign?
Mr. Channon: I have some sympathy with the remarks of the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), although he was not referring specifically to scrap and build. Ship scrapping was tried in the 1930s and I, like most people, believe that that scheme was riot a success. It is unlikely that it would be a success in the present climate.
Mr. John Ryman: The Minister has referred to a worldwide shortage of orders. What steps, if any, have he or the Government taken to influence orders and so stop them from going abroad? Is he aware, for example, that P and O placed a mammoth order with Norway quite recently, which should have gone to British Shipbuilders? If he is destroying the British shipbuilding industry today—and that will be greeted with horror and disgust in the north-east—what will happen if there is a worldwide revival of the industry and the work-force has been broken up and the yards have been closed?
Mr. Channon: On the specific point which the hon. Gentleman raised about getting British shipowners to buy in British yards, our recent record is similar to that of most other European countries. I have examined the figures and they are more or less the same for all the countries concerned. It is in the interests of British shipowners to place orders in British yards if the terms are right. In the case of P and O, a ship is being built at the present time.
Mr. Stuart Bell: In relation to the Secretary of State's last statement, will he accept that all the statements that Labour Members have show that we have the worst record in the EEC on placing orders for ships in domestic yards? Will he also note that in the House today anger turns to sadness and sadness turns to shame at his exposition of our shipbuilding industry and what the Government propose to do about it? He has not referred to the 1,350 jobs at Smith's Dock. He has not said that the £1,400 million was essentially to cover deficits
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and was not new investment, and that it went to the naval industry as well as the merchant yards. He has not said a word in praise of the shipyard workers in Smith's Dock who have rendered a signal service to our local economy and have delivered on time ships of the highest quality. He has mentioned Cuba and China, but he has not said whether, if those orders transpire, the yards that he has mentioned today for closure will stay open. Will he now give the House the commitment that, if those orders transpire between now and the end of the year those yards, including Smith's Dock, will stay open?
Mr. Channon: If an adequate number of orders can be found to keep those yards open, that will be highly desirable and something that I would welcome. But it would be wrong of me and misleading to those concerned if I were to stand at this Dispatch Box this afternoon and say I thought that that was at all likely. That would be raising false hopes, and I would be misleading people. That would not be doing them a service. Only about a third of the orders by British shipowners have been placed outside the United Kingdom, and that is about the average for the rest of Europe.
Mr. Harry Ewing: Is the Secretary of State aware that his response to the constructive proposals put by my right hon. and hon. Friends displays a lack of willingness to try to rescue the difficult situation in British Shipbuilders? Why, when Ministers come to the Dispatch Box and willingly put thousands of people on the scrapheap of unemployment, do they always look for the worst example in the world, in this case Sweden, and seek to emulate that worst example? Have the Conservative Government now lost any willingness to try to do just a little hit better than the worst for the people of Britain? Does the Minister realise that the Government established BSC (Industry) Ltd because they decimated the British steel industry, that they established NCB (Enterprise) Ltd. because they decimated the coal industry, and that they will now establish British Shipbuilders Enterprise Ltd. because they are decimating British shipbuilding?
Mr. Channon: The hon. Gentleman is being unfair. I have already told the House of the Government's support of £1,400 million since 1979. It is unreasonable for the hon. Gentleman not to accept that and to say that the Government have not supported the industry. He says that I have quoted only the Swedish industry. I give him the example of the Dutch, the Japanese, the Koreans, the Germans and the French whose industries are also cutting back, some in a major way.
Mr. Christopher Chope: What has been achieved since 1979 by spending £1,400 million of taxpayers' money other than to delay the evil and sad day that we are now experiencing?
Mr. Channon: It was right to spend that money and to support British Shipbuilders in the way that I have described. The situation that I have described today is unavoidable and is happening in many other countries.
Mr. Dennis Skinner: Has not the Minister got a cheek to talk about shipbuilding being viable when in the past few years the Government have had double standards about viability in parts of the British economy? Why, if everything is tested by viability, was Johnson Matthey bank provided with £100 million of taxpayers' money in 1984 even though it was bankrupt and had run

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out of reserves? Why cannot shipbuilders' families be treated in the same way as people in the casino economy? What about the viability of the Common Market, which received £250 million of British taxpayers' money because it went bankrupt last year? What about the Export Credits Guarantee Department. Last year, £250 million went down the Swanee and the Government bailed it out? That was not viable. Is the House of Lords viable? Is this place viable? [HON MEMBERS: "Are you viable?"] It seems to me that the Government are concerned only with their own people. They would rather throw people on the scrap heap—the dole queue—than keep them in jobs. It is like the fellow in Bolsover told me the other day—this Minister is educated beyond his intelligence. Come on, answer.
Mr. John Smith: Does the Secretary of State realise that through all the wearisome recital of platitudes and ministerial hand-wringing to which we have been subjected this afternoon, he did not announce one new initiative to help the British shipbuilding industry to survive? Does he realise that the cost to the taxpayer of the unemployment that has been announced, with a spin-off in other industries, will probably amount to £80 million a year? Should not that be taken into account in assessing the public expenditure consequences? Those people in the industry who have not been subject to redundancy announcements today desperately need reassurance. Can he tell us that he will not be back at that Dispatch Box before the end of 1986 announcing more redundancies if he is so confident that merchant shipbuilding is not at stake?
Mr. Channon: The future of merchant shipbuilding in this and every other country will be determined by the orders that are won and the work that can be found. British
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shipbuilders and the Government will try to ensure that they are. No one can be sure that that will happen, but that is our aim. Indeed, as the right hon. Member for Manchester, Gorton (Mr. Kaufman) said when he had responsibility for this industry,
"Shipbuilding industries all over the world from Japan to Sweden are accepting the inevitability of contraction, and Britain cannot be insulated from this world trend."—[Official Report, 24 February 1977; Vol. 926, c. 1653]
That is the truth of the matter and it is hypocritical to pretend otherwise.
Hon. Members: Resign.
Mr. Speaker: Mrs. Lynda Chalker.
Mr. Andrew Faulds: On a point of order, Mr. Speaker. It is to do with these exchanges, Sir. Will you promise to reprimand me on future occasions, as you have recently reprimanded that dreadful and persistent drip, the hon. Member for Bolsover (Mr. Skinner), because if you were to do that, that would ensure that my frequently more witty observations would be engraved on those tablets of stone, the Official Report?
Mr. Speaker: The words which go into Hansard are those spoken when a Member is called to speak by the Chair, not those made from a sedentary position.
Mr. Faulds rose—
Mr. Speaker: I shall do what the hon. Gentleman originally asked.
Mr. Faulds: But further to that point of order, Mr. Speaker. It was you who changed the ruling. In the very old days when I first came into the House witty interventions from a sedentary position were recorded in the Official Report, and it frequently lightened the exchanges.
Mr. Speaker: Maybe, if they were witty.

Foreign Affairs Council
4.17 pm
The Minister of State, Foreign and Commonwealth Office (Mrs. Lynda Chalker): With permission, Mr. Speaker, I should like to make a statement about the meeting of the Foreign Affairs Council, which took place in Brussels on 12 and 13 May 1986. I represented the United Kingdom.
As a precautionary measure following the Chernobyl disaster, the Council agreed a Commission proposal for a regulation to ban the import of certain foodstuffs from the USSR, Poland, Bulgaria, Romania, Hungary, Czechoslovakia and Yugoslavia. The ban entered into force on 13 May and will last until 31 May. It will be reviewed on 20 May, taking account of the latest scientific evidence. In addition, member states have undertaken to set contamination standards for intra-Community imports which are no higher than those for domestic produce, to limit the contamination level in exports to other member states to that acceptable to the recipient state, and to lift national controls on imports.
The Council discussed Community strategy in preparation for the launch of a new GATT round of trade negotiations.
The Council discussed improvements to the Community's mandate for negotiations with Mediterranean third countries on the adaptation of their cooperation and association agreements following the accession of Spain and Portugal. There will be further discussion at the June Council.
The Council reviewed the steps being taken to normalise the Community's relations with Turkey in preparation for a meeting of the Association Council which is expected to take place in the early autumn.
The text of a joint declaration by the Council, member states, Commission and Parliament against racism and xenophobia was agreed.
The Council also had a further general discussion of the current budgetary situation in the Community during which the Commission outlined its plans for a 1986 supplementary budget and the 1987 preliminary draft budget.
An Association Council with Malta was held in the margins of the Council. The operation of the EC-Malta association agreement and the possible implications for Malta of the enlargement of the Community were discussed.
Mr. George Robertson: The most important part of the Minister's statement related to the constraints placed on trade from eastern European countries. She did not enlighten the House much on that important subject. It seems that this whole shambolic pantomime has had far more to do with safeguarding the agriculture of certain European Community countries than with protecting our citizens from food contaminated by radioactivitiy.
The way in which the provisional ban—it is no more than a provisional ban—has been arrived at gives us and the British people no great confidence in the capacity of the Community to take action to deal with such emergencies. In any event, will not the existing shambles be made even worse by today's meeting of experts if it produces suggested safe radiation levels which some countries are almost bound not to accept?
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The European Council has assuredly failed to reassure worried people who have watched naked commercial interests put before agreed safe standards. In addition, we have undermined our relations with eastern European countries whose produce, alone of that of all the nations over which the Chernobyl cloud has moved, is to be affected. Can we be reassured that any future action on imported foodstuff will be directly related to the risk of contamination and less related to public relations exercises in reassurance and national commercial protection?
Will the Minister tell us what advice the World Health Organisation gave on a wholesale, seven-nation ban? Finally, will she accept that the initial, unforgiveable secrecy of the Soviet authorities must not be used as an excuse for Communist-bashing by any members of the European Community, as the most vivid lesson of the disaster is that we need closer relations within Europe as a whole and not a dogfight?
Mrs. Chalker: The measures that the United Kingdom has taken since 2 May affected all incoming produce from the Soviet Union and Poland. Our measures were already in existence and, as one item in a series of items at the Foreign Affairs Council, we agreed that there should be standards that should be regularly reviewed. The hon. Gentleman says that confidence is undermined because this process has taken time, but it is bound to take time. However, the United Kingdom Government have made it absolutely clear, right from the beginning, that our citizens were protected in relation to produce coming into this country. It must be right regularly to review a situation when that situation is developing. I hope that the hon. Gentleman will not pour scorn on that in future, as he has today.
Of course we abhor the secrecy over this matter, which has made it more difficult for countries to take the decisions that they wish to take. Every country in the 12 has taken its own measures and we have come together in the decisions that I have referred to and which have been mentioned in the papers for some days. I believe that not only the British people but others in the European Community can have confidence in all the checks that are going on in all member countries, and of which the institutions concerned with these matters are fully aware.
Sir Bernard Braine: While I fully accept the good sense of the British Government's stand, is not there an underlying anxiety, which was expressed by the hon. Member for Hamilton (Mr. Robertson) and which some of us share? Having attended the gathering, does my hon. Friend detect any new resolution among European Governments to move more in step? For example, why is aid given unconditionally by European Governments to some countries that continue to violate basic human rights? Is there yet any realisation of the poor impression that European Governments other than our own gave to the world by not facing up to Libyan terrorism and thus forcing the Americans to take action on their own part?
Mrs. Chalker: I assure my right hon. Friend that there is a definite resolution among all member countries of the 12 not only to allay anxieties, but, more than that, to make sure that there are measures in force in each country to test produce to make sure that it does not reach the markets of those countries.

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There was no lengthy debate on human rights. There was an agreement on racism which follows exactly the policy in force in this country.
Mr. Nicholas Budgen: What does it mean?
Mrs. Chalker: It follows our own policy in exactly the way that I think my hon. Friends would, in the past, have probably accepted. It is not a legally binding declaration, but it reflects existing policy, which condemns all forms of discrimination on racial grounds.
I should add to my right hon. Friend the member for Castle Point (Sir B. Braine) that we did not have a full discussion about Libya. There were discussions in the margins, but they were not on the agenda.
Mr. Richard Livsey: Was there any discussion about the impact of the Chernobyl disaster on European Community stocks of food? As the Ukraine produces 20 per cent. of USSR agricultural production, is the Community ready to assist the Russians?
The Minister's statement refers to a supplementary budget. Will that match the estimates of Agra Europe, that it might reach 1·5 billion ecu in the current year?
Mrs. Chalker: If the USSR seeks to buy cereals on the world market from stocks, that will be dealt with in the normal way. The proposed supplementary budget is within the 1·4 per cent ceiling. It will include the further 500 million ecu for the British 1985 abatement and it will certainly not go as high as the hon. Gentleman suggested. It will be kept within the strict budgetary guidelines to which we have always sought to adhere.
Sir Anthony Kershaw: Is it not surprising to hear the risk of contamination being taken so lightly in the House? Is it not entirely because of the lack of information from the Soviet Union and eastern Europe that we have been compelled to take steps that may or may not be necessary, but which have to be taken as a precaution?
Mrs. Chalker: Indeed. My hon. Friend is absolutely right. Contamination, whether of food or of the ground, is a most serious matter. The 12 members of the European Community and the countries in eastern Europe now seem conscious of the need to share information at the earliest possible opportunity. That has been one of the outcomes of the discussions that we have had. The International Atomic Energy Agency will be co-ordinating the gathering of information from whatever source. I welcome the Soviet agreement to provide the IAEA with reports on radiation levels. That will enable us to have fuller discussions at earlier dates. The IAEA board of governors will be meeting next week to discuss the matter.
Mr. Tom Clarke: Does the hon. Lady believe that the single sentence in her statement about the budgetary problems faced by the Community is sufficient information for the House? Is the Community facing bankruptcy, as many people believe? Is there a crisis on the way? If so, should not the House know now rather than later?
Mrs. Chalker: As the budget has not yet been presented to the Council of Ministers, there was no substantive discussion of it. That is why I have no substantive discussion to report on. It is quite clear that we
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have already done well to secure the price cuts that were agreed in April by the Agriculture Council. They would not have been secured without budgetary discipline. We shall continue with that discipline to ensure that we reach the kind of solution for a reduction of surpluses that this country and the rest of the Community seek.
Mr. Ian Gow rose—
Mr. Teddy Taylor: No supplementary budget?
Mr. Gow: What contribution was made by Her Majesty's Government to the discussion about a declaration against racism and xenophobia? Will my hon. Friend enlighten the House about the advantages that will accrue to mankind as a result of the discussions that took place?
Mrs. Chalker: Once more I have to say to my hon. Friend that the discussion followed the discussion by us of our existing policy and, indeed, the discussion in many other countries. I have already said that it was a combination of all our views to condemn all forms of discrimination on racial grounds. It is a moral and political undertaking. It is not legally binding.
Mr. Budgen: An undertakine—ah!
Mrs. Chalker: But it has been made available to the House. Three months ago my hon. and learned Friend the Minister of State, Home Office, placed an explanatory memorandum in the Library of the House. That will provide my hon. Friend with all the details. There was no substantive discussion.
Mr. Robert Parry: On the situation in Turkey, are Her Majesty's Government and the Council of Ministers satisfied about the progress towards human rights and democracy in that country and about the trials there of trade union leaders and peace activists?
Mrs. Chalker: These matters were very much to the fore in the discussions that my right hon. Friend the Prime Minister had with the Prime Minister of Turkey. The same line has been taken in the discussions within the European Community. Some Opposition Members seem to enjoy refusing to acknowledge that progress is being made. That does nothing to promote human rights. If the progress that is being made were to be welcomed, we would encourage countries that do not observe the human rights standards that we wish to see to do even more. I hope that the hon. Gentleman will do that.
Mr. Teddy Taylor: Is it not unfortunate that an announcement about another massive Common Market overspend has been made on the same day as the announcement of the closure of a third of our shipbuilding industry, because there is not money with which to build ships? On the containment of radioactive food from east Europe, has my hon. Friend the Minister found the answer to a question that has been asked several times since last Thursday: how do we distinguish a Polish pig from an East German pig if both of them are shipped through Leipzig, which is not covered by the new restrictions?
Mrs. Chalker: My hon. Friend might have had a chance during the earlier statement to ask his question about shipbuilding. But it is not simply a question of overcapacity in shipbuilding throughout the world.
Mr. Taylor: Just like farming.
Mrs. Chalker: I say to my hon. Friend that the money which in his view should be spent on ships should certainly not be spent on further surpluses.
Mr. Taylor: It is being spent on surpluses.
Mrs. Chalker: My hon. Friend knows full well that every measure that we can take is being taken to reduce surpluses. On his question about East German pigs or Polish pigs, he knows that imports of such material are covered by the agreement.
Mr. John Evans: Why was East Germany left out of the ban? That struck most British people as being very odd indeed. Can the Minister answer a question that I was asked at my surgery last Saturday? Why have the British Government banned the import of foodstuffs from Eastern bloc countries, although they have informed British citizens that they are free to travel on holiday and business to those areas, where they will surely be eating those very same foodstuffs?
Mrs. Chalker: East Germany is beyond the 1,000-km limit that was drawn, but the West German Government have undertaken that any of the produce coming from East Germany will be fully tested under their system of monitoring.
Mr. Budgen: May I thank my hon. Friend for her important and detailed statement about racism? Will she please reassure the friends of the EEC that her statement was not mere vacuous posturing and that the British Government will be pressing all the nation states of the EEC to introduce immediately into their national Parliaments legislation that is analogous to the much-respected race relations legislation in this country?
Mrs. Chalker: I suggest to my hon. Friend that if he looked at the legislation that is on the statute books of other countries, he would find that the member states of the European Community could not have agreed to this declaration unless that policy was already on their statute books.
Mr. David Winnick: Bearing in mind the relations that the Foreign Affairs Council has with other European countries, were the Foreign Ministers aware of the continuing concern that such a deeply stained individual as Kurt Waldheim might be elected President of Austria? Although this is a matter for the people of Austria, there are, nevertheless, few people who now believe that he told the truth about his wartime role. Clearly he knew full well what was going on and that the German army and the Nazis were involved in killings and deportations.
Mrs. Chalker: Although I know that it has become commonplace to try to attribute every ill in the world to the European Community, I have to tell the hon. Gentleman that the Foreign Affairs Council did not discuss the matter that he has raised.
Viscount Cranborne: Would my hon. Friend be kind enough to tell the House how the EEC defines xenophobia? For the benefit of my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) is she able to tell the House what penalties the EEC and this Parliament will impose if anybody transgresses and becomes xenophobic under the definition established by Brussels?
Mrs. Chalker: I have already said that this is not a legally binding declaration
Mr. Budgen: What is the point of having it, then?
Mrs. Chalker: It reflects existing policy in this country I should have thought that my hon. Friend would have had the—
Mr. Evans: Decency?
Mrs. Chalker: Maybe that is the word. I should have thought that my hon. Friend would have had the "whatever" to realise that discrimination on racial grounds will not lead to progress for anybody in this country or anywhere else in the world.
Mr. Tam Dalyell: May I put a very precise, factual, informed question to the Minister? Although she may be unable to answer it at once, I am sure that she will be able to get information from the Box and answer it later. At what time, on what day, some two or three days before the announcement and news came from Sweden, did a telephone call come through from Russia to a British member of the International Atomic Energy Agency in Vienna asking for advice about how to deal with graphite fires? Precisely what was the Russian request and in what terms was it phrased? I do not say that it mentioned Chernobyl, Minsk or Kiev, but what, precisely, was the question? What were they asking for? Did the British official of the International Atomic Energy Agency take any steps to let the members of the United Kingdom Atomic Energy Authority know? And did members of the Atomic Energy Authority—
Mr. Speaker: Order. Did all this go On at the Foreign Affairs Council?
Mr. Dalyell: The Minister raised the question of what happened, and I am asking a very precise question. Was the IAEA informed? Did the IAEA inform the United Kingdom Atomic Energy Authority and were Ministers informed? The Minister knows perfectly well that—
Mr. Speaker: Order. I think that the hon. Gentleman has done jolly well. It would make an excellent Adjournment debate.
Mrs. Chalker: I shall read the Official Report with great care. I shall look into the matters that the hon. Gentleman has raised and try to unravel what is going on.
Mr. Colin Moynihan: Will my hon. Friend confirm whether there were any discussions at the meeting of the Foreign Affairs Council regarding the International Atomic Energy Agency and, if so, what was the outcome of those discussions?
Mrs. Chalker: Indeed, the International Atomic Energy Agency was discussed briefly because we were able to welcome the Soviet agreement to provide reports on radiation levels to the IAEA. We also welcomed the concerted effort by the IAEA not only to gather the information but to identify further needs for data and to disseminate that information to all interested parties—a crucial establishment of the facts against which further measures should be judged.
Mr. Andrew Faulds (Watley, East): Will the hon. Lady propose to the British ambassador in Russia and to her colleagues in Europe that their ambassadors in Moscow should attend the funerals of those who have died

725
at Chernobyl and of those who will die from the effects of the Chernobyl disaster because, but for the grace of God, there go all of us?
Mrs. Chalker: I think that the hon. Gentleman exaggerates a little. We have total sympathy with the relatives of all those affected by the disaster, but I fear that the location of those funerals will not be made known to foreign embassies, so the suggestion may not be possible to implement. Certainly, the suggestion will be considered.
Mr. Peter Bruinvels: Did the Foreign Affairs Council discuss the ludicrous idea that members of the European Assembly should be granted immunity from arrest and prosecution? Is that perhaps because they are xenophobic? Secondly, I am chairman of the British-Malta parliamentary group, so can my hon. Friend inform the House what is happening about Malta in view of the enlargement of the EEC?
Mrs. Chalker: On my hon. Friend's first question, I do not think that we can take that issue much further this afternoon. On his second question, we are talking about the Association Council in the margins. We had a discussion informally, and then a little more formally, about security in the Mediterranean, but there was no question of coming to any decisions. Discussions with Malta will continue about its associaton with the European Community. Nothing substantive was decided.
Mr. James Lamond: What about the important question asked by my hon. Friend the Member for St. Helens, North (Mr. Evans) concerning what is to happen to those people who journey beyond the Iron Curtain, such as the important IPU
726
delegation? Fourteen members of the House, led by the Deputy Prime Minister, no less, will no doubt be eating and drinking their fill of the food that is not allowed into this country. Is there not something rather illogical about that?
Mrs. Chalker: When an IPU delegation is on its way, I am sure that it carefully considers where it is going, what it is going to do, and what it will eat and drink. I am certain that, as the delegation is going to Moscow, the Soviet authorities will take good care of the hon. Gentleman and ensure that nothing goes near his lips that will be injurious to him.
Mr. George Robertson: I asked the Minister a question earlier which she did not answer. What was the advice given by the World Health Organisation about the need for a wholesale ban on the produce of seven nations?
Mrs. Chalker: A wholesale ban on the produce of seven nations was not the advice given and it was certainly not the advice accepted by the national experts, who are also meeting in Brussels on Monday. I shall look again at what the hon. Gentleman says so that it comes up at the review meeting if that is necessary.
Mr. Dalyell: On a point of order, Mr. Speaker. When officials know perfectly well the answer to a question asked by an hon. Member, should there not be some mechanism by which the Minister can answer, even if she does not know the answer immediately? Should not the Minister be able at least to make a statement at the end of Question Time? All that I ask for—
Mr. Speaker: Order. We have a heavy day ahead of us and the hon. Member for Linlithgow (Mr. Dalyell) asked a question which was rather long. I have no doubt that he will receive the answers for which he asks. There are many other ways of asking such questions.

Shipbuilding Industry
4.43 pm
Mr. John Smith: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter which should have urgent consideration, namely,
"the crisis in the merchant shipbuilding industry."
I shall be brief, but I hope that my brevity will not lead the House to think that there is any lack of seriousness in my application.
The matter is specific because this afternoon we heard the proposal to close three shipyards and to make 3,500 workers in the shipbuilding industry redundant. The matter could hardly be more specific for those most directly affected.
The matter is important because, as was made clear in our exchanges when questioning the Secretary of State, the whole future of the British merchant shipbuilding industry may be at stake. It is difficult, if not impossible, to underestimate the significance of this afternoon's statement and the matters to which it relates.
The issue requires urgent consideration because time is short and 1986 may be the year in which it is decided whether the British merchant shipbuilding industry survives or disappears. An important part of the industry has already disappeared as a result of the statement this afternoon. I submit that the subject falls within the purview of Standing Order No. 10.
Mr. Speaker: The right hon. and learned Member for Monklands, East (Mr. Smith) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter which he thinks should have urgent consideration, namely,
"the crisis in the merchant shipbuilding industry."
I listened with great care to the right hon. and learned Gentleman, as I listened with care to what was said in the House earlier this afternoon. As the right hon. and learned Gentleman knows, my sole duty when considering an application under Standing Order No. 10 is to decide whether it should be given priority over the business already set down for this evening or for tomorrow. I regret that I cannot rule that the matter meets all the criteria laid down in the Standing Order and I cannot, therefore, submit his application to the House.
Mr. Neil Kinnock: On a point of order, Mr. Speaker. The House respects your judgment in the conventional form and is aware of all the matters that you must take into account when coming to that judgment. It would be inappropriate to make any comment on that, but Ministers are present and they understand that this is an emergency, although we understand why you do not regard it as such. I hope that the remarks by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) will be taken into account, so that in the very near future we may have a debate.
Mr. Speaker: The right hon. Gentleman and the whole House understands that I am bound by the Standing Order. I hope that there are other ways in which this important matter may be raised on the Floor of the House.

Hinkley Point Power Station (Accident)
4.47 pm
Mr. Paddy Ashdown: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the refusal of the Central Electricity Generating Board to publish the full report of the hoard of inquiry into the Hinkley Point accident of 29 November."
That accident involved a release of radioactivity at Hinkley Point in Somerset and resulted in the issue of anti-radiation tablets to the work force for only the second time in Britain. The CEGB promised a board of inquiry into the accident, which would be made public.
On 13 December I was promised in a parliamentary reply that a full report of the inquiry would be issued "soon". Since then the CEGB has given me five promises about the imminent publication of the report, including a number of specific dates. Each has failed to materialise.
At 2 o'clock this afternoon, the CEGB made public a four-page document saying that there was very little to worry about. But it has specifically refused a request from me to make public the full report.
The CEGB has said that the accident was not very serious. I have no wish to disbelieve that, but the public have a right to see the evidence. There can be no acceptable reason, in the light of public concern at the time, highlighted by the Chernobyl tragedy, why the full report on this important accident should not be published. The CEGB cannot expect to receive public support for nuclear power while it keeps secret such vital information.
The CEGB's refusal runs; counter to the undertakings to me. It also makes a mockery of the assurances by the Secretary of State for the Environment and the Secretary of State for Energy yesterday that in future nuclear matters would be conducted in the open.
This is an important and specific matter because we can have no faith in the assurances of the Secretaries of State about openness in nuclear matters if they allow the CEGB to keep this document secret.
In view of the widespread concern about nuclear power, it is now important that the House receives assurances that the Secretaries of State for Energy and the Environment will live up to their undertakings about full openness on this and all other nuclear matters.
Mr. Speaker: The hon. Gentleman seeks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the refusal of the CEGB to publish the full report of the board of inquiry into the Hinkley Point accident on 29 November."
I regret that I have to give the hon. Gentleman the same answer that I gave to the right hon. and learned Member for Monklands, East (Mr. Smith). I listened carefully to what the hon. Gentleman said, but I regret that I do not consider that the matter that he has raised is appropriate for discussion under Standing Order No. 10, and I therefore cannot submit his application to the House.

BILL PRESENTED
  DOG FIGHTING PENALTIES (No. 3)
  Mr. Harry Greenway presented a Bill to amend the Protection of Animals Act 1911 to increase the penalties for offences against animals under Section 1(1): And the same was read the First time; and ordered to be read a Second time upon Friday 4 July, and to be printed. [Bill 62.]

Shops (Sunday Trading and Workers' Protection)
4.50 pm
Mr. Ray Powell: I beg to move,
That leave be given to bring in a Bill to reform the law relating to Sunday trading and to provide protection for workers in the retail industry.
Most hon. Members are well aware of the anomalies in the 1950 Shops Act and certain other Acts that govern the laws applicable to regulation of shop opening hours both on a Sunday and for the remainder of the week. They are also aware of the difficulties and problems of enforcing those laws. As legislators, we have a responsibility to change the law so that its application is enforceable and practical, thereby ensuring the right and just protection of the people it covers—be they shopowners, shop workers or shoppers.
There are three major criticisms of the 1950 Act—first, its many and varied anomalies, secondly, its complications and thirdly, the difficulty of enforcement. Many argue that the Act was hopelessly out of date when it was enacted, and after 36 years of far-reaching changes in the structure and pattern of retailing it is necessary to alter something that is entirely out of touch with modern conditions. The Act is a complicated piece of legislation; it is not easy for a lawyer. let alone the average shopkeeper, to understand and interpret.
There is also the problem of shops selling a mixed range of goods, some falling within the exemptions in the act and others not doing so. Compliance by shopkeepers and understanding by shoppers are severely tested, and effective enforcement becomes virtually impossible.
Added to all that, the penalties for breaches of the Act have not kept pace with the times. Currently, the maximum penalty for infringing the Sunday trading restrictions is £1,000, and only £100 for breach of general closing hour requirements. The level of fines imposed by magistrates is little deterrent to large traders to break the law. Frustration with the inadequacies of the penalties deter local authorities from enforcing the law.
Clearly, the Act has produced such difficulties and so much criticism that there is a profound need for change. Many have shared that view and attempted to change the Act. There have been six attempts by private Members in the other place and 12 attempts in this House, and in 1961 the Home Office departmental committee, under the chairmanship of Lord Crathorne, conducted considerable research. Yet they all failed to introduce the necessary legislation. Of course, most recently the Government's own proposals for complete deregulation were rejected by the House. Some hon. Members have suggested that, after that marathon debate, we should forget about reform.
730
However, I am sure that most hon. Members, appreciating all that I have stated about the Act, would like action to be taken.
My Bill would seek the establishment of a standing conference under the chairmanship of the right hon. Member for Castle Point (Sir B. Braine), who should succeed to the position of Father of the House if he is reelected, and who is recommended by the present Father of the House, my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan). That proves conclusively that I am suggesting things beyond the realms of personal political prejudice on this issue.
Representatives on the standing conference would include all organisations that declared interest in the recent debate—Members of Parliament, religious organisations, the Keep Sunday Special campaign, the National Chamber of Trade, the Retail Consortium, the Multiple Food Retailers Employers Association, local authority associations, the police, the Union of Shop. Distributive and Allied Workers, other interested unions and representatives of consumers. In addition, all other organisations involved in retail distribution should be considered, including ACAS, so that the broadest spectrum can be covered.
The standing conference would be asked to consider in detail the 1950 Act and other Acts involved in the retail trade, and, by agreement, to recommend to the House either amendments to the existing Act or a new shops Act. It would be asked also to consider other factors before presenting its recommendations. such as the exercise of the right to worship, the employment, remuneration and working conditions of employees, costs and prices in retail distributive industries, the interests and wishes of consumers, the incidence of crime, the demands on transport, the effect on the environment and the interests of residents.s
The Bill is necessary, for a number of good and cogent reasons. Equally important, it should enable adequate protection for some of the most low-paid workers in this country. The Bill would make a serious attempt not to tinker with one or two sections of the 1950 Act, but to make constructive proposals for wide, involved and comprehensive consultation with those directly or indirectly affected. It is also essential to show the nation that this House is prepared to continue with consent, discussion and negotiation and to make all attempts necessary to remedy and rectify any and every law that is widely treated with contempt.
It is for those and all the other reasons to which I have referred that I ask the House to give leave to bring in my Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. Ray Powell, Mr. Thomas Torney, Dr. Oonagh McDonald, Mr. Don Dixon, Mr. Frank Haynes, Mr. Lawrence Cunliffe, Mr. James Hamilton, Mr. Sean Hughes, Mr. David Winnick, Ms. Jo Richardson, Mr. Frank Cook and Mr. Terry Lewis.

SHOPS (SUNDAY TRADING AND WORKERS' PROTECTION)
Mr. Ray Powell accordingly presented a Bill to reform the law relating to Sunday trading and to provide protection for workers in the retail industry; And the same was read the First time; and ordered to be read a Second time upon Friday 4 July and to be printed. [Bill 63.]
Orders of the Day

  Wages Bill
  As amended, (in the Standing Committee), considered.
  Ordered.
  That the order in which proceedings on consideration of the Wages Bill, as amended, are taken shall be new Clauses relating to Part I, Amendments to Clauses 1 to 11, Schedule 1, new Clauses relating to Part 11, Amendments to Clause 12, Schedule 2, Clauses 13 and 14, Schedule 3, Clauses 15 to 25, new Clauses relating to Part III. Amendments to Clauses 26 to 28. remaining new Clauses. Amendments to Clauses 29 to 31, Schedules 4 to 6, Clause 32 and new Schedules.—[Mr. Kenneth Clarke.]

  Wages Bill
    New Clause 9

      DEDUCTIONS
      '(1) No deduction

      (a) shall be made front any workers wages and no payment shall be required from any worker for any disciplinary purpose of more than 10 per cent. of gross wages in any pay period;

      (b) shall be made or payment required for disciplinary reasons unless the employer can show that the worker concerned was guilty of the act or omission complained of.

      (2) Any worker who is dismissed for complaining to a tribunal about an illegal deduction or payment shall have a right to apply to the Tribunal for an immediate reinstatement or adequate compensation for loss of employment.
      (3) When the Tribunal finds that a worker was subjected to an illegal deduction or request for payment, it shall award compensation to the worker taking account of the loss and inconvenience suffered by the worker and the failure of the employer to comply with the law.'.—[Ms. Clare Short.]
      Brought up, and read the First time.
      5 pm
      Ms. Clare Short: I beg to move. That the clause be read a Second time.
      Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to take the following amendments: No. 3, in clause 1, page 1, line 15, at end insert—
      'and;
      (c) the worker concerned was guilty of the act or ommission complained of'.
      No. 19, in clause 2, page 3, line 34, leave out 'in retail employment'.
      No. 20, in line 34, leave out from 'makes' to 'any' in line 35.
      No. 28, in clause 3, page 4, line 34, leave out 'in retail employment'.
      No. 30, in page 5, line 2, leave out 'in retail employment'.
      No. 43, in clause 5, page 7, line 9, at end insert—

      '(e) that an employer has dismissed a worker because he made a complaint to an industrial tribunal under this section, or

      (f) that the employer has not shown that the worker concerned was guilty of the act or omission complained of, or

      (g) that the amount deducted or paid by one or more workers was greater than the value of the loss complained of'.

      No. 44, in page 7, line 44, at end insert—

      '(c) the tribunal shall make an award of compensation to the worker taking account of the loss and inconvenience suffered by the worker and the failure of the employer to comply with the law;

      732

      (d) in the case of a complaint under subsection (1)(e) the tribunal shall order reinstatement or adequate compensation for loss of employment'.

      Ms. Short: Today we shall consider part I of the Bill. Having completed Second Reading, consultation and consideration in Committee, most people are aware that the Bill is seeking to cut the pay of 3 million of Britain's poorest workers in the wages council sector—for example, textiles, hotel and catering, shops and distribution. It is not widely understood, however, that the Government are making changes, which are set out in part I, to make it more likely that workers will be subjected to fines and deductions from pay for disciplinary reasons. The examples given to us in Committee by the Under-Secretary of State for Employment were lateness, absenteeism and failure to comply with health and safety standards, and the Bill refers to deductions or fines for cash shortages and stock deficiencies. The Bill makes it clear that an individual who can prove that he is not guilty of causing any shortage of cash or stock might still be subject to a deduction and have no right to have that reversed.
      The laws that will be repealed by the Bill are set out in the Truck Acts, and the Paymaster General is fond of sneering at their old age and making that a dogmatic reason in itself for repealing them, irrespective of whether they have worked well. The part of the Truck Acts that applies to deductions and fines is not that ancient in that it was enacted in 1896. That measure is currently in force and it limits the extent to which deductions and fines are used to discipline workers. I am sure that its repeal will lead to a great increase in the use of deductions and fines.
      The Act lays down a number of conditions, which means that employers must think carefully before making deductions. It provides that there must be a signed contract, with the worker signing and agreeing that he is willing to be subject to deductions. The employer has to provide written particulars of the sum that has been lost or of the omission that led to the fine or deduction. A register must be kept of all fines and the deduction must not exceed the value of the loss of which the employer is complaining. The amount deducted must be reasonable.
      In the light of these restrictions, the making of deductions is not a widespread practice in British industry. These restrictions are to be lifted, however, and under the new law anyone will face a fine or deduction if he agrees to sign a contract which states or even implies that his employer might subject him to fines or deductions. There will be no requirement that a fine must be reasonable or must not exceed the loss to which the employer has been subjected. The employer will not have to specify what act or omission led to the loss that led in turn to the deduction.
      The only protection that the Government are offering is that a limited number of workers—those in retailing—will not be able to lose more than 10 per cent. of their wages each week if a deduction is made as a consequence of a cash shortage or stock deficiency. The Government have made no case for that protection being restricted to retail workers when many other workers might be subjected to deductions.
      The Government tell us that we need not worry and that all workers will be properly protected. They say that if a worker is subjected unfairly to a deduction, he will be able to take his case to a tribunal. However, if a worker goes before a tribunal and says that he was desperate for a job, signed a contract which said that he might face deductions

      733
      in certain circumstances, had £5 or £10 deducted from miserly low wages, can prove to the tribunal that he was not responsible for the loss and states that a fellow employee is willing to confess, the tribunal will not be able to reverse the deduction.
      The tribunals will be extremely weak. They will be able to impose a penalty on an employer only to the extent of ordering him to restore the amount of deduction or fine. Therefore, the Bill is a charter for employers to make a deduction when in doubt. If an employer is found to have broken the law in making a deduction, he will have to pay back only the £5 or £10 that was deducted. That sort of sum might be considerable for someone earning £50 a week, but it will not be very much for the average employer.
      The new clause and the amendments seek to amend the Bill to prevent the widespread growth of deductions from workers' pay for disciplinary reasons. The Government seem to envisage the operation of the Bill as part of a great move to macho management. The new clause would impose a limit of 10 per cent. of gross wages on all deductions and fines for all workers. If the Government are not willing to accept this proposal, they must tell us why retailing is so special. Why will it be all right to deduct 20 per cent. of the wages of a cleaner or hotel chambermaid, for example, who might be working for similarly low wages of £40 to £50 a week, and not all right to take more than 10 per cent. from the wages of a retail worker? We accept the 10 per cent. limit—we would like a lower limit—but there is no reason why such protection should extend only to retail workers.
      My argument is not theoretical. In the past, employers have taken enormous sums from low-paid workers. Petrol pump attendant work is notorious. The famous case of Barrett was taken under the Truck Acts. A young man who was unemployed agreed to accept a job at a low rate of pay because he was desperate for employment. His contract stated that he would be responsible for any till shortages. He thought that that was reasonable, but he did not know that many others would have access to his till. In time, he faced deductions of £20 a week from a wage of slightly more than £50 a week. If the Bill is enacted without the amendments that we are proposing, it is likely that many more workers will face deductions of that sort without being able to take action.
      Secondly, the new clause provides that an employer who makes a deduction from a worker's wages will be required to show that the individual facing a deduction or fine was guilty of the act of which he complains. It is remarkable that under the Bill an individual who can prove that he had no responsibility for a shortage of cash or stock, or some other loss or damage, and can prove that someone else carried the responsibility, will still face fines and deductions if he has signed a contract that states that he might be subjected to fines or deductions. That is unacceptable, and we believe that all reasonable people will take that view. We are proposing that workers should be subjected to deductions and fines only when the employer can show that the worker was guilty of the act or omission of which he complains.
      Thirdly, the new clause addresses itself to those who are subject to an illegal deduction and take their case to a tribunal in the way that the Government propose, only to find that they lose their job because the employer is annoyed at being dragged before a tribunal for breaking
      734
      the law. At present, a worker who has been employed for less than two years has no right to initiate an action for unfair dismissal. A part-time worker—40 per cent. of retail workers are part-timers, and it is a sector where the Government expect many deductions to be made because they have made special provision for retailing—has to be employed for five years before he has the protection of being able to complain that he was dismissed unfairly.
      Under the Bill, someone who faces an unfair deduction and loses money from a small wage packet that he cannot afford to lose is offended and hurt by the suggestion that he is guilty of dishonesty when he is not. He may go to all the trouble and loss of time from work that is involved in taking and proving a case before a tribunal. But if he takes that course, he can be sacked, and he will find that he can do nothing about that. This is outrageous. We are saying that anyone who is sacked for taking a case to a tribunal that finds his employer guilty of making an illegal deduction should have the right to bring an action for unfair dismissal and be restored to his job or to receive compensation for the loss of employment.
      New clause 9 would empower tribunals to award compensation to a worker, taking into account the loss and inconvenience to that worker of taking the case to the tribunal. The Minister told us repeatedly in Committee that we must not worry about some low-paid workers being likely to lose large chunks of their money because, if anything wrong was done, they would be able to take their case to an industrial tribunal. Taking a case to an industrial tribunal takes an awful lot of courage, organisation, time, energy and money. It means loss of pay for the days that have to be taken off to prepare the case and to appear before the tribunal, and travelling time.
      A worker in retailing might earn £50 or £60 a week and be subjected to a deduction of £5 or £6, but it will cost more than that to take the case to a tribunal to prove innocence, and the worker can be awarded only the £5 or £6 deduction. The Government are saying that people have the theoretical right to take their case to a tribunal. In practice, employees will be scared to take a case to a tribunal because they will be sacked if they do, or they will not be able to afford to pursue the case. No employer will be intimidated by the possibility of being taken to a tribunal, however, because the punishment that can be meted out is so small.
      The Minister made much of the fact that small employers are worried about industrial tribunals. Surveys show that they do not like to be taken to tribunals and that they fear cases of unfair dismissal. We accept that, but the Government have to take account of tribunals' powers in such cases. They can force an employer to take back a sacked employee or to award compensation, which can be thousands of pounds, for loss of a job if the employer is unwilling to take the worker back.
      Small employers find tribunals frightening because they fear losing and what might be done to them. Employers will laugh at the tribunals on deductions, however, if their only power is to force the employer to pay back £5 to some low-paid employee. The employer will not bother to go along. Rather he will send the office-keeper or even write a letter saying, "I do not care about the outcome." Being taken to a tribunal will not be onerous. It will prove no sanction in preventing employers from imposing illegal deductions on low-paid employees.
      Everything about the new clause is reasonable. If it is not accepted, workers throughout the country should note

      735
      that, from now on, any employer who wants to impose fines or deductions on workers can have a field day. It will be simple to take large chunks from workers' pay. That is likely to happen extensively in the least well-organised sectors of the economy, where low pay and bad employment conditions are prevalent.
      The Government have introduced a power, but seem unconcerned to include sufficient protections to ensure that the right to make a deduction or to impose a fine will not be exercised unless there is real evidence that a worker is guilty of an offence. Nor have they ensured that, if an employer behaves wrongly, a worker can have his or her rights protected.
      Without the new clause, the Bill will be deeply objectionable. It will lead to a widespread growth in deductions, conflict and tension in industry and unjust reductions in the wages of some of the poorest paid workers in the country.
      5.15 pm
      Mr. Ian Mikardo (Bow and Popular): In Committee, we often complained—the complaint was made by some Conservative Members as well—that much of the Bill showed' evidence of having been drafted by people who had never seen the inside of a factory, store room or retail establishment. Many factors about real commercial and industrial life have not been considered in the least.
      We see things most clearly if we take hard practical examples. I shall take the example of a trade supplier. It may be a supplier of motor accessories or tools. It is therefore outside the retail industry—a wholesaler. The front part of the establishment has a trade counter, behind which is a store. The chap who owns it employs a young fellow as a storesman, who goes to the back to fetch stuff out.
      Mr. Richard Holt: The hon. Gentleman used the words "trade counter". I did not hear him mention them in Committee, but they are relevant in this context. According to the explanatory notes, we are concerned with places where members of the general public are served. Would he like to guess whether a person who goes to a trade counter is a member of the general public or some other special type of person who is not covered by the Bill?
      Mr. Mikardo: I am talking about an establishment that sells to the trade, such as a builder's merchant who sells to builders, not members of the general public, or a chap who sells tools to engineers, or a chap who sells motor accessories to repair garages. His having a trade counter takes us entirely out of the ambit of retailing.
      The storesman picks up the requisition and puts two of these, one of those and two of those in a tray and brings them out to the trade counter to sell them. There is nothing to prevent the owner from telling his storesman at the end of the week, "There is a stock deficiency of £40." He does not have to prove it. He can tell his storesman, "I shall make a deduction from your pay," and because the business is not retail, the deduction is not limited to 10 per cent. of the storesman's wage.
      The owner does not have to say that the deficiency is in five-inch spanners, and that nine have gone. He does not have to say, "I know that you are responsible because I saw you going out with some spanners in your jacket pocket." He does not have to adduce one tittle of evidence to demonstrate that the storesman is responsible for the
      736
      stock shortage. Indeed, he does not have to produce one tittle of evidence to demonstrate that there is a stock shortage at all. He can invent a stock shortage. He can even create a stock shortage himself by nicking half a dozen electric bulbs and taking them home. He could then tell his assistant, Joe Bloggs, "Half a dozen bulbs are missing and you have to pay for them."
      I hope that the Minister will not say in reply, "Not many employers would behave in that way." Of course not many would, but the law tries to deal as well as it can with all contingencies, not merely with majorities or minorities. Only a small percentage of the population engages in house-breaking, but that does not stop us having laws to deal with those who do.
      The employer can tell an employee, "There is a stock shortage," but he does not have to prove that there is one or that the employee is responsible for it. Someone else may have been responsible. He may have been responsible himself. On that basis, he can make a deduction
      The lad knows that he was not responsible for the shortage because he knows that the old man nicked the bulbs and took them away. He is angry about that, so he decides to go to an industrial tribunal. That is not easy. As the Minister said—my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) agreed—there are difficulties for employers, but the difficulties for employees are much greater. Those who work in sizeable establishments which are unionised have the help of their unions, but the wages council industries are almost entirely composed of trades where the average establishment is small and the turnover of labour is rapid by comparison with other trades.
      That is true of the hotel and catering industry. It is true to a lesser extent in some parts of the garment and needle trades and to an even lesser extent of retailing. In all those trades, unionisation is rare because of the difficulty of organising in establishments where only a handful of people are employed, and where that handful of people is liable to change rapidly.
      Therefore, the trade supplier for whom the lad works is unlikely to be unionised.
      Ms. Clare Short: My hon. Friend is right to say that the workers who are most likely to be subject to deductions are low-paid workers in the wages council industries, but the provisions mean that, in future, all workers will be liable to such deductions.
      Mr. Mikardo: I appreciate that it could happen to any worker. The Bill gives the employer greater power than rests with the judiciary, because it gives him the power to fine without proof of guilt. No magistrates court, county court, assizes, appeal court or High Court could fine me without having established that I was guilty of something. But under the Bill, any worker anywhere—those who will get it in the neck will be the low-paid workers in the wages council, non-unionised industries—can be fined by his employer in a way that the Lord Chief Justice could not fine me. He can be fined by his employer without a jot or tittle of evidence that there has been any culpability.
      For the life of me, I do not understand how anyone can begin to justify that position. There is no hon. Member who, if it happened to him, would not believe himself to be the victim of a gross injustice and who would not scream to high heaven about it. How can we justify inflicting upon others a condition which we would never accept for a moment as applying to ourselves?

      737
      Let me return to my trade supplier. The lad is aggrieved and, notwithstanding the fact that he knows little about tribunals and that he does not have a trade union to represent him and that he does not know where the tribunal is or how to get the forms, he asks round—perhaps at the citizens advice bureau or perhaps his friends—and he appeals to a tribunal. His employer says, "You had better drop that, Harry, because if you continue with it, you will get your few quid from me, but you will get the sack as well." There is not one word in the Bill to prevent that.
      Even worse, the employer need not even forewarn the lad. The lad goes to the tribunal and gets an award giving him back his own money. That is the only award that he will get. There will be no compensation for the time during which he lost the money or damages for the aggravation that he has been caused or the injustice of being falsely accused of theft. There is not a halfpenny of compensation for that. All that he will get from the great victory is his own money back. Then his employer says, "I am fed up with you. You were out last Thursday at the tribunal. I do not want you; I want people who will be here every day." There is nothing in the Bill to prevent that.
      I shall listen with great care to the Minister, who, in his personal relationships, is a fundamentally decent chap, trying to justify, within the parameters of his personal morality, this hideous, raving injustice.
      Mr. Holt: We had many a happy hour in Committee debating this element of the Bill. Like the hon. Member for Birmingham, Ladywood (Ms. Short), I am sure that many thousands of people will discover, to their surprise, the legislation that the Government have introduced. I found elements of surprise even at the highest levels of the Institute of Personnel Management. Indeed, I found a Minister who was amazed when I told him what the Government proposed to do, and who encouraged me to continue my vendetta against the Government on this part of the Bill.
      The Government have been extremely clever in many ways; one must give them credit for that. Many Conservative Members, not necessarily supported by Opposition Members, are in favour of the proposals in the wages council element of the total package. But this curate's egg brings with it not only the simple abolition of the wages councils or their restructuring and reformation, but more work for the lawyers in the industrial tribunal courts. I put down a marker that I shall return to industrial tribunals several times.
      I endorse the view of the hon. Member for Bow and Poplar (Mr. Mikardo) that the Government's proposals will create a minefield of trouble for them. I have the simplistic view, as one who has worked in industry for most of his life, that the best industrial relations are those engendered between employers and employees without interference from Government. The Government should be only a last resort when all else appears to have failed.
      The Truck Acts have been on the statute book for a long time, but that does not necessarily make them bad. Marriage laws have been on the statute book for a long time, but we are not proposing to abolish marriage and to introduce some new consolidation Bill.
      Mr. Tom Pendry: Give them time.
      5.30 pm
      Mr. Holt: The Government have no right to bring before the House change for the sake of change, without justification. The Government have made no case for changing and abolishing the Trucks Acts' element regarding deductions from wages. I can find no Government supporters for the fundamentals of this issue.
      The Government will say, "We carried out a survey which showed that the majority of employers favoured the 10 per cent. deduction method." If one is asked whether one wants to be shot in the left or right foot. one makes a choice, but one would prefer not to be shot in the foot because it is unnecessary. From my practical experience and from what I have read in the media and, more particularly, in my institute's journals, I can find little evidence that there is a minute case, let alone an overwhelming one, for the introduction of this element.
      Obviously, there are rogue employers and rogue employees, but the law in situ is working. It is not breaking down.
      The Parliamentary Under-Secretary of State for Employment (Mr. David Trippier): I have often heard my hon. Friend speak about industrial tribunals, and I respect his view, although I do not share it. Is he suggesting that he would prefer the existing Truck Acts which cover this part of the Bill to remain in force without the built-in protection which he must acknowledge will be given to workers by limiting the deduction to 10 per cent. of pay?
      Mr. Holt: My experience is that the law is known and understood by, and working for, the most humble in the land to the most eminent members of the Confederation of British Industry and the Institute of Directors. The Minister may argue that greater protection is being afforded to employees, and I believe that he sincerely thinks that. However, I cannot accept that, because I believe that the scenario put forward by the hon. Member for Bow and Poplar is much more realistic in this context. As I understand the Bill—I am willing to be corrected—the protection that the Government are affording is only that deductions will be limited to 10 per cent. of pay, and that if a person goes to a tribunal, that money must be repaid without compensation.
      Ms. Short: In Committee and today we have talked as though the 10 per cent. protection will extend to all workers, but that is not so. It applies only to workers in retailing for cash shortages and stock deficiencies, not for lateness or absenteeism. Therefore, only a small group of workers will be protected by the 10 per cent. provision.
      Mr. Holt: I accept that, and it is a reason why I am puzzled why the Government are introducing this element as such an enormous protection. In my 30 years in business, no employee has ever told me a tale of an employer removing money, without the employee having a right to go to court. Employees already have that right. We are only duplicating it or, worse still, weakening it.
      Mr. Dave Nellist: There is a significant difference which I may develop if I am called to speak. Under the old law, an employer must take a worker to court and prove his guilt, but under the Bill a worker must run to an industrial tribunal and defend his innocence. That is completely different.
      Mr. Holt: With respect, I think that that worked both ways. I understand that an employer will now be able to rely on an industrial tribunal.
      I did not wish to develop my view on industrial tribunals at this point, but a tribunal is a lottery. All hon. Members who read my magnificent speech in December on industrial tribunals—at that time in the morning, there were not many listening—will know that the Minister accepted the Russian roulette aspect of industrial tribunals. Industrial tribunals cannot have an appeal made against them except on a point of law, whereas under the present law, if a deduction is under dispute, the full panoply of the law is available to both sides, and the case may end up in the other place or, perhaps, even in Europe. Under the Bill, that will be denied. Therefore, far from giving added protection to employees, the Minister is seeking to give extremely limited protection; it is subject to no penalty and it is a lottery. Once a case goes to an industrial tribunal, the outcome depends on how the chairman felt when he got up that morning and came to work. Either the employee or the employer will be lucky, because that is how the case will be decided. A decision will be made only on whether the deductions made up to that point were lawful, or were unlawful and must be repaid.
      This seems to be legislation for the sake of legislation. The honest truth is that the Government merely intended to abolish the Truck Acts. That may have been argued and justified. However, to erect a smokescreen by suggesting that they are being replaced by something superior, fairer and nicer simply does not hold water. It does not bear examination. The Government's case is wafer-thin, and water is seeping through.
      Even at this late stage I suggest that my hon. Friend the Minister has a deathbed repentance on this aspect of the Bill. Then, some of us could with much greater heart support other parts of the Bill which we favour. I seek to be fair and discriminating by supporting the parts which are good law and by not supporting those which are bad law. The Government have produced bad law on this aspect, and it will not be long before it will bring the whole Bill into disrepute. I do not want that.
      In his intervention, the Minister made it clear that in reply he would seek to justify this element by saying that it gives additional benefit to employees by making industrial tribunals available—I promise that we shall talk more about industrial tribunals later—and by staggering repayments over two, three or more months—[Interruption.] Did I hear something about 10 o'clock tomorrow morning? We cannot expect the country to support Conservative Governments and Ministers—[HoN. MEMBERS: "Hear, hear."]—if they introduce bad laws for which there is no public support. There is no public support for the abolition of the Truck Acts from professional, managerial, trade union or working people. There is none. Apart from a place which I am not supposed to mention, I can find little support for these proposals.
      Whenever I speak on this very serious subject, I try to introduce a light-hearted tone. The hon. Member for St. Helens, North (Mr. Evans) and I have debated this issue several times, and he knows that hon. Members should not be misled by my style. I have spoken to many of my right hon. and hon. Friends who are not all in the Chamber today, and I think that I reflect their views when I say that the Government have impaled themselves on something
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      similar to the Shops Bill. The Government should listen to what their Back Benchers are saying, especially if those Back Benchers are in touch with industry and commerce.
      I have yet to be shown any evidence to support this part of the Bill. My hon. Friend the Minister must make his case, or we shall be here for a long time. If he does not make his case, I shall carry on asking question after question, trying to find what justification there is for introducing such a deduction. Regardless of whether the employee is highly or lowly paid, the deduction is very immoral. It is immoral to take money away from people without justification or proof and without any recourse to a normal court. That part of the Bill does not merit my support. The Government are seeking not merely to throw out the baby with the bath water but to throw out the bath too.
      Mr. Ken Eastham: I rise to support the amendment, and am greatly encouraged by some of the comments of the hon. Member for Langbaurgh (Mr. Holt). In Committee, there were one or two exchanges on this issue, and perhaps our points have now sunk into Conservative minds. If the hon. Gentleman is joined by some of his colleagues tonight, there may be one or two dramatic changes to the Bill.
      In the early stages of the Bill, we said that we thought that it was the Government's original intention to abolish wages councils altogether. But they realised that it was such an outrageous idea that they retained the Bid while nobbling its contents.
      5.45 pm
      The Truck Acts date back more than 150 years to 1831. The Government are making these alterations for the sake of change. They certainly will not benefit the workers and that is why, in Committee, Opposition Members resisted the Bill with great tenacity and conviction for two and a half months. The Minister will probably say that there will be a contract. That is true, but we object to the fact that the contract is to be solely on the employer's terms. We frequently pointed out that in such desperate times, with 4 million people unemployed, low-paid workers—who are the subject of this Bill—may be induced or forced to accept intolerable conditions just for the sake of the job.
      As my hon. Friend the Member for Bow and Poplar (Mr. Mikardo) pointed out, the employer's entitlement to make weekly deductions is quite outrageous. There is no onus on the employer to make a case for the deduction. We contend that the employer could be dishonest about his case for deciding to withhold part of an employee's weekly wage packet. Time and again we have said that if there is any dishonesty—something that we would not defend—the matter should be pursued through the courts. The police could be brought in and a case could be made. Thus the employer could prosecute in a court or dismiss the man. There are options other than the one that seems to have the Minister's favour.
      For the first five or six weeks in Committee the Minister kept on saying that employees could go to an industrial tribunal. But during one sitting he suddenly said that he did not want too many appeals to be made to tribunals as that might clog up the works. He implied that the odd case might be all right, but that people should not pursue their rights too often.
      Mr. Holt: I believe that that point coincided with a written question to the Minister from me. I asked him what

      741
      provision he was making for additional courts or tribunals. He replied that he was making none, and suddenly the need for tribunals also waned.
      Mr. Eastham: I am grateful to the hon. Gentleman for that intervention.
      Hon Members on both sides of the Committee then pursued the Minister about the provision being made for personnel, and so on. The Minister said that there would be other people. On another occasion. he suddenly mentioned ACAS, as though that might make up for the deficiencies in wages inspectors. We found it less than convincing that the Minister should say in one breath that someone could go to an appeal tribunal and then say in another that he did not want too many appeals as they might clog up the works. That did not show any great enthusiasm for justice for the workers.
      The amendment makes a good case. If a worker goes to a tribunal, he may incur considerable personal expense. He will have to take time off work, and he probably will not be compensated for it. For all we know, the appeal tribunal may not be in his town, and he may have to pay the cost of travelling 10 or 15 miles in order to prove his innocence. Indeed, after spending time and money he may be found innocent, but he has no apparent right to be reinstated or compensated. Because of that, we are correct in saying that it is a worthy amendment and the Minister should give real consideration to it.
      Mr. Holt: The hon. Gentleman made an interesting and valuable point about the fares that people have to pay. The hon. Gentleman realises that the fares are available to anyone going to a tribunal if he has to travel over six miles. These fares are paid out of public money. The money does not come from a respondent who may have flouted the law in getting an appellant to the tribunal in the first place.
      Mr. Eastham: The hon. Gentleman has reminded me that people who have to travel a certain distance will receive compensation. Nowadays, it costs a small fortune to travel on public transport, even if one is travelling only three or four miles. There is a considerable penalty on those who must undertake two journeys.
      When a worker proves that he has a legitimate claim, he should have certain rights. If the Minister were fair minded, he would say that there is justification for what we are saying and he is prepared to put that part of the Bill right. We do not like the Bill. We object to it clause by clause, but at least we are trying to make it more just than it is.
      We contend that there should be penalties for an employer as well as an employee. I have never known anything as one-sided as the Bill. The Bill contains next to no penalties whatsoever for an employer. For those reasons, I hope that the Minister will be sympathetic and give serious thought to the matter.
      Mr. Nellist: I have spent the best part of three months considering the Bill in a Committee Room. It is interesting that of all the Tory Members who sat silent during the Committee's consideration of the Bill, only a couple are now prepared to sit in the Chamber during the debate. Be that as it may, the central importance of proposed new clause 9 relates to part I of the Bill which deals with the right of an employer to make deductions. The tone and
      742
      tenor of the Bill and of the Government's general approach to working people in British society are set in line 2 of clause 1 which states:
      "An employer shall not make any deduction from any wages of any worker of his".
      That is the possessive nature of the kind of society the Tory Government would like to see. The hon. Member for Penrith and The Border (Mr. Maclean)—
      Mr. Don Dixon: Unamended.
      Mr. Nellist: Yes, unamended. The hon. Member for Penrith and The Border introduced a description in Committee of the relationship between master and servant. He thought that the Bill epitomised that description. It is necessary for us to attempt to amend, at Report stage, the language and principles of that part of the Bill. My comrade the hon. Member for Bow and Poplar (Mr. Mikardo) said in Committee that the Tory Government are only interested in workers insofar as they are interested in the appendages at the end of their two arms. That description came out in the debate on that part of the Bill.
      Unless we succeed in adding the new clause and making the consequent amendments to part I, employers will be given power to discipline workers by fining them. Clause 1 is one-sided. It gives power to employers to deduct the wages of workers, albeit with a maximum limit of 10 per cent., without even making mandatory the joint signature of an employer and a worker in an agreement that that is the case. No doubt we shall deal with that specific point later.
      The Bill weakens the current position under the Truck Acts as to the power of employers to make deductions. Central to the arguments which other comrades have already deployed, it reverses the whole concept of what we, and, no doubt you, Mr. Deputy Speaker, were told at school—that under British law a person is innocent until he is taken to court and proved guilty. The Bill allows an employer to be the judge, jury and executioner. An employer may implement his decision by imposing a fine, saying. as a concession to a worker. "Go to an industrial tribunal, if you wish to do so, to prove and defend your innocence, because I, as an employer, have decided that you are guilty."
      Ms. Clare Short: The position is even worse than that described by my hon. Friend. I am sure he agrees that it is possible for a worker to face a fine, go to a tribunal and prove his innocence but, because an employer can say that under the contract of employment the employer is entitled to impose a fine, he cannot have it overturned. Even if a worker proves his innocence, he can still be subjected to a fine.
      Mr. Nellist: My hon. Friend is absolutely correct. I hope to return to the point later. To add to the point that she made, third parties could be involved, which could be established by the tribunal, but the power would exist for an employer to make the original deduction. As a result of information coming from embassies, certain immigration procedures, such as those which applies when people appear at airports and points of entry, have been tightened up. In most British legislation there is a concept that a person is innocent until he is proved guilty. The Bill turns that concept on its head.
      Let us imagine that an employer discovers that there is a shortage of stock or a shortage of money in the till. There could be a number of reasons for that. It could be because

      743
      of poor management or a lack of supervision of those working on the till or doing the stock checks. It could be due to the systems that are set up for stock control. It could even be due to the fact that too few workers are employed in a certain section and the work load causes stress and strain. The Bill does not attempt to deal with problems such as those. It merely gives an employer the immediate right of fining an employee whom he considers caused a problem. It could be that a third party, some other person, is responsible for the condition. In that event, an employer can say, "Go and prove your innocence in an industrial tribunal."
      Ms. Clare Short: Is my hon. Friend aware of the report of the employment unit at the law centre of north Kensington entitled "Fingers in the Till"? The report demonstrates that many stock shortages are caused by incompetent organisation, such as when a shop reduces prices but fails to knock the values off the notional stock. The shop thinks that it has a shortage but it does not. It is perfectly possible that the shortages are no one's fault but are due to incompetent organisation.
      Mr. Nellist: My hon. Friend has referred to the example I gave of the possibility of a stock or till shortage occurring. The Kensington law centre, citizens' advice bureaux and my own legal and advice service in Coventry are aware of cases. Labour Members of the Committee received a number of documents and affidavits. We were given thousands of examples of individual workers in the retail trade and the petrol industry who were fined for actions which were not of their own doing—a third party or incompetence was the main reason. Workers are offered that option to prove their innocence before an industrial tribunal.
      Difficulties are associated with appearing before the tribunal. A worker would lose a day's pay by taking that opportunity to prove his innocence. He might have to pay for legal assistance. Character witnesses would lose wages. Even if the worker won his case, he would get back only the money that had been deducted in the first instance by the employer.
      6 pm
      In most cases, the worker is likely to be someone on low pay. In Committee, the Under-Secretary of State made some points about that. A low-paid worker in receipt of family income supplement whose employer deducted the maximum of 10 per cent. of the gross wage from net take-home pay, after tax and national insurance deductions, might appeal through the normal appeal channels. His net pay might then be below the family income supplement level and he would be worse off than workers in a similar position. According to the letter of 8 April, by the Under-Secretary of State for Employment—the hon. Member for Rossendale and Darwen (Mr. Trippier)—it would not be possible for that worker then to claim additional family income supplement.
      The Government lay down definitions stating the level below which the income of a family which includes a certain number of children should ever fall; yet the Bill would allow an employer to make deductions from a worker's wages which could take him below the poverty line defined by the Government. and he would have no redress.
      The Under-Secretary of State held out a rather funny lifeline. In a letter written on 11 March, he stated that if
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      it were proved before an industrial tribunal that a deduction was incorrectly made, it was possible for the worker to appeal to the independent Inland Revenue tax commissioners for a tax rebate on that deduction. A worker on £100 a week gross, which is a pretty high wage in the service sector, whose net take-home pay was £65 or £68 a week could lose up to £10 in deductions because the employer had accused him of being responsible for a till or stock shortage. That worker could go to the tax commissioners and attempt to claim £3·30 of that sum. What a farce. If an employer suspects that an employee is a thief, he should take the employee to court where the burden of proof should rest on the employer.
      Mr. Martin Flannery: I am not an expert on the Bill and was not a member of the Committee. What I have heard is appalling and unbelievable. Do I understand that clause 9 as it stands turns the whole basis of British jurisprudence on its head? The whole of our law is based on a person being innocent until proved guilty. The clause does the very opposite. This clause alone is a massive step. I hope that the Bill does not turn the whole of British jurisprudence on its head. If the clause does that, it is almost a crime to put it before the House.
      Mr. Nellist: I am sorry to disappoint my hon. Friend, but the clauses do not get any better. Until 1979, our youth were taught in schools that a person was innocent until proved guilty by a jury of 12 of his peers. My hon. Friend the Member for Sheffield, Hillsborough (Mr. Flannery) eloquently summed up in fewer words than I have used what the clause does—it turns British jurisprudence on its head. People will be assumed to be guilty. They will need to prove their innocence before an industrial tribunal.
      A full-time worker who has not worked continuously for two years or a part-time worker who has worked fewer than 30 hours a week and has not been in the job for five years can go back to the employer the day after winning the case in the industrial tribunal and, at the flick of a finger, the employer can sack him. The worker cannot go back to the industrial tribunal a second time to ask for his job back, because he would not qualify.
      Mr. Dixon: If an employer sacked an employee, could it not take the whole of his lying-on pay to pay the rest of the fine?
      Mr. Nellist: That is correct.
      Most of the workers affected by the Bill earn £60, £70 or £80 a week. We are talking about an employer's power to deduct 10 per cent. from gross wages, which means £6, £7 or £8 a week. Unlike most Tory Members, many of whom count their income in tens or hundreds of thousands of pounds a year, the workers about whom we are talking have only one job. They are not like the right hon. and learned Member for Hexharn (Mr. Rippon) with his 35 jobs—one as a Member of Parliament, one as a QC in the law courts and one as director of a company and with 32 chairmanships under his belt. The right hon. and learned Gentleman might be able to afford to have deducted from his pay packet 10 per cent. of the income from one of those 35 jobs. A poorly paid worker in a time of mass unemployment—when 4·5 million people are denied the chance to work—tries to bring up his family on £60, £70 or £80 a week, yet an employer may have the

      745
      power to deduct 10 per cent. of his wages without needing to prove that a crime has taken place. Labour Members oppose that.
      On 11 February. the Paymaster General and Minister for Employment described this part of the Bill as providing a
      "fairer set of statutory rights concerning deductions"—[Official Report. 11 February 1986; Vol. 91, c. 801.]
      The Bill does not mention that the deductions must be fair and reasonable. It turns the concept of justice upside down on its head. It allows employers to decide guilt and say to the workers, "You have the opportunity before an industrial tribunal to attempt to prove your innocence." The measure will be used mainly against low-paid workers—as my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) said, mainly those in areas where trade unions are not yet predominant in industry. For all those reasons and for others, which no doubt my hon. Friends will give, I urge the House to adopt the new clause and the consequent amendments and to defeat this part of the Bill.
      Mr. Pendry: I shall not take too long, because the points made by Labour Members and by the hon. Member for Langbaurgh (Mr. Holt) have shown that this part of the Bill and, indeed, the whole Bill, are nonsense. The hon. Member for Langbaurgh must not believe that the sanctity of marriage will necessarily be preserved by a Government as hellbent on deregulation as this one. The Under-Secretary of State might address his remarks to that.
      I am glad that my hon. Friend the Member for Sheffield, Hillsborough (Mr. Flannery) is present and to make the point he did, and that we have a wider audience, although it is not much wider, than in Committee.
      Dr. Norman A. Godman: It is a good audience.
      Mr. Pendry: Yes, it is a good audience. My hon. Friends are beginning to understand—I do not blame them—the ramifications of the legislation. As a result of the debate on this and other clauses, the people outside the House will also begin to understand what will hit them.
      The decency of my hon. Friend the Member for Bow and Poplar (Mr. Mikardo) always shines through on these occasions. He began in Committee by referring to the Minister as a "chum". He has gone down a little and called him a "decent chap". I suspect that my hon. Friend, because he is decent and so perceptive, probably knows something that we do not know. I want therefore to finish my speech, soon so that I can hear the reply by the Under-Secretary of State to our points. It may be that, because last Thursday Rossendale went Labour for the first time in its history, the hon. Gentleman is a little shaken and is rocking a little. He might therefore listen more attentively to what people, especially his constituents, say.
      I am pleased that my hon. friend the Member for Birmingham, Ladywood (Ms. Short) made it plain that this does not just affect low-paid workers. The clause affects a whole range of workers in this country. Of course, the Opposition are mostly concerned about low-paid workers, because a 10 per cent. deduction is bad enough for some workers—we think it is too much—but for the workers we represent, such as home workers, cleaners and many others, it is an unbearable burden for them to have to endure.
      Ms. Clare Short: It is very important that we all remember that it is not just 10 per cent. There is a limit of 10 per cent. per week for workers in retailine, but for all other workers there is no limit. We must not mislead the public into thinking that it is only 10 per cent., bad as that is, because the sky is the limit.
      Mr. Pendry: I was just about to make the point that that is the bottom line. The deduction is open-ended and the ramifications are such that, when the full force of our case is heard outside, I believe that the Government will be forced to think again and, not for the first time, will have to retrack their legislation in a short space of time.
      As I have said, most of the points have already been made and it would be silly to go over them again. However, the workers involved in this part of the Bill are certainly proved guilty before they have even had a trial. The employers have it all their own way under the Bill at present.
      Many of the points made in Committee have not been listened to clearly by the Minister. However, at times he did attempt to answer our points and said that he would reflect on them and come back to us. I hope that this is one occasion when the Minister will answer the forceful points made in Committee and on the Floor of the House much more positively and constructively.
      The hon. Member for Langbaurgh (Mr. Holt) got it right again. I do not want to praise him too much because it could damn him with his colleagues. Unfortunately, he has made great points, but he has not voted with us in the Lobby. I hope that on this occasion he will have the courage. It is no good making those points and sounding reasonable if, at the end of the day, he does not join us in the Lobby. No doubt he will attract a great deal of attention in his local press.
      Mr. Holt: I would just like to comment on the hon. Gentleman's point about the local press. We are discussing the Wages Bill, on which it might be thought that I was being a little bit naughty to my own side, on the same day as the Government announced the closure of Smith's Dock in my constituency.
      Mr. Pendry: I am sure that that has reinforced the hon. Gentleman's position in supporting us on this occasion.
      The hon. Member for Langbaurgh rightly said that the law should be a backstop for industrial relations. I should have thought that the Conservative party had learned its lesson. They began trying to introduce legislation in a heavy-handed way in the early 1970s and they had to shelve that legislation because it clearly did not work. My bet is that this legislation will be shelved in a similar way. I certainly wish to hear the Minister disprove that and perhaps he can make an early start by agreeing to the points that have been made by my hon. Friends in this debate.
      6.15 pm
      Mr. Richard Caborn: We should cast our minds back to the Second reading of the Bill, especially when we are dealing with part 1 in relation to the Truck Acts. The case argued by the Government was, at surface value, probably correct. The Truck Act of 1831 probably needed some amendment and refining and we probably needed a new act to be put on the statute book to give some support and protection to workers. In fact, we have seen a complete reversal of the Truck Acts and what they stood for.

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      The fundamental principles of the Truck Act of 1831 was "fair and reasonable". The Truck Acts stood for a certain amount of justice. That is not to say that we must keep the Truck Acts on the statute book for ever more. However, one would have hoped that the fundamental principles of the Truck Acts, which have been tried and tested, would have remained. I have worked in industry for a number of years and have had dealings with the Truck Acts. I know they have operated well and the employers and trade unions have taken on board the fundamental principles and tried to develop them in negotiations when the Truck Acts have been involved.
      Many hon. Members, especially from the Opposition, who were not on the Committee, have been aghast at what is in section 1. Clause 1 of the Bill has turned natural justice on its head. A worker now has to prove his innocence after being found guilty. That moves away completely from the underlying position of the Truck Acts which clause 1 of the Bill is supposed to update.
      Nobody in the House has defended the Government's position. It would be difficult for the alliance to defend the Government's position, because there are no alliance Members in the Chamber. They have not tabled any amendments to the Bill, let alone to clause 1. That is deplorable, when the alliance is always stating that it is a protector of workers' rights. Having said that, nobody has come to the defence of the Minister. In fact, he has been attacked by his own party for the position the Government have taken on clause 1.
      When the Minister opposes the new clause, I have no doubt that the defence will rest on the industrial tribunals. Many points have been made as to how there are blockages in the industrial tribunals, and how difficult and expensive it is for people. In low-paid areas people may be fearful of going to industrial tribunals.
      Many low-paid workers have been employed for less than two years. Also, the restrictions within those establishments could debar many people who could be caught under this part of the Bill from using the tribunals, even if they wanted to.
      In Committee I think that I clearly illustrated what we are talking about. It was brought to my attention that in one of the country clubs in Sheffield—there are not many of them—the owner had sacked four employees. Not only had he sacked them, but he owed them between £150 and £200. They did not even know the reasons for their sacking. When they tried to extract the reasons from the owner, he said that they had been sacked for stealing and dishonesty. They were absolutely flabbergasted. There are a number of courses they can adopt. They can go to tribunals or the courts. However, that is the type of employer that many people will have to deal with. When natural justice is turned on its head, those people have greater licence than before. The principles that were originally emobdied in the Truck Acts should be adhered to in the Bill. However, they will be turned on their head, and there will be less protection for the workers than previously.
      When we were discussing part I of the Bill in Committee, we brought fraud to the Minister's attention. That was reported in the Financial Times of 13 March, which showed that 40 per cent. of United Kingdom companies are now experiencing fraud, and in London alone there was £867 million-worth of fraud, which had been notified to the police and the fraud squad. We are
      748
      trying to deal with fraud, yet in the Bill we are taking away a fundamental right and turning British justice on its head; we are attacking the lowest paid in our society, and taking away their protection.
      I hope that Conservative Members have listened to the only constructive statement to have come from Conservative Benches, totally opposing part I and the removal of those basic principles. I hope that having done so, many of the colleagues of the hon. Member for Langbaurgh (Mr. Holt) will support new clause 9 in the Lobby.
      Mr. Dixon: I shall confine my remarks to our amendments Nos. 43 and 44, which will protect workers.
      My hon. Friend the Member for Sheffield. Hillsborough (Mr. Flannery) was astonished at part I. I should like to tell him that it gets worse. Throughout the Bill, we are talking about deductions. They mean fines. When the Bill is on the statute book, the employer will have the right to fine his employee without getting or submitting any evidence.
      We are talking about part-time or low-paid workers, and many employees who are not covered by trade unions. If an employee has the audacity to go to an industrial tribunal, to prove his innocence, there is nothing to stop the employer sacking the individual. It is not just the individual. There might be a stock deficiency or cash shortage in the till, and two, three or four employees might be sharing the till or looking after the stock. Under the Bill, the employer has the right to fine the four employees 10 per cent. of their salaries for the stock deficiency or cash shortage. That is what the Bill is about.
      We must accept that, in the working class movement, we have one or two rascals who might steal from the till. But the Conservative party might have one or two reasonable Members to support our amendment.
      However, if someone stole, the rest of his workmates could be fined by the employer. That is one of the reasons why we have tabled amendment No. 43, which will protect the employee against being sacked if he has the audacity to take his employer to an industrial tribunal, simply to prove his innocence. Under amendment No. 43, a worker may present a complaint to a tribunal
      "that the employer has not shown that the worker concerned was guilty of the act or omission complained of"
      Under the Bill, the employer does not have to have any evidence. As my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) said, there could be a deficiency because of a fault in the till. If the employer found a deficiency, he could fine all his employees 10 per cent. of their wages.
      Amendment No. 44 concerns industrial tribunals. If the worker goes ahead and takes the chance of getting the sack from his employer by going to an industrial tribunal to prove his innocence, and if he proves himself innocent, the only thing that the employer is obliged to do is to give the employee the 10 per cent. of his wages that he previously stole. There is no recompense, compensation or expenses. My hon. Friend the Member for Manchester, Blackley (Mr. Eastham) made that point. I think that the hon. Member for Langbaurgh (Mr. Holt) will agree with this. At times, people from Newcastle have to go to Darlington for industrial tribunals, and vice versa. Because one works in Newcastle, that does not mean that the tribunal will sit in Newcastle. It might be in Jarrow, Iangbaurgh or somewhere else.

      749
      We are talking about employees, some of whom are receiving the princely sum of £57 a week. They will have to find the fares to go to the industrial tribunal, take time off work and take the chance of getting the sack. If they require a witness, the witness will have to be prepared to sacrifice his wages and pay expenses to prove the employee's innocence. That is what we are dealing with in part I. It is only the tip of the iceberg, I remind my hon. Friend the Member for Hillsborough.
      I believe that our amendments Nos. 43 and 44 give some safeguards. They do not make the Bill more palatable for people who have any concern about low-paid workers or other employees, but at least it is better than what we have at the moment. I hope that the hon. Member for Langbaurgh and one or two of his colleagues who have listened to the debate will join us in the Lobby. Not one person has defended part I or clause 5. One would have thought that those who supported the Minister in Committee would defend him tonight, but not one has done so. The only contribution from Conservative Benches has been an attack on this part of the Bill. I hope that some Conservative Members will join us in the Lobby.
      Mr. Trippier: We have had the opportunity to debate at length the principal issue behind the amendments, which is the deduction from wages. We had some interesting and long debates in Committee. Wherever possible, I have tried to meet the concern of some Opposition Members. There is evidence of that on the Order Paper because we shall move amendments aimed at doing that.
      The amendments that we are now considering go too far. I do not want to drive a wedge between my hon. Friend the Member for Langbaurgh (Mr. Holt) and his new-found friendship with Opposition Members as a result of the debate thus far, but it seems to me to be absolutely extraordinary that there is more that divides them than unites them on this issue. First, Opposition Members who have spoken so far will agree that they are in favour of industrial tribunals. The hon. Member for Bow and Poplar (Mr. Mikardo) recognised their importance. My hon. Friend the Member for Langbaurgh does not like them at all. He has been consistent throughout—
      Mr. Holt: I am happy to be chastised for what I am guilty of, but not for what I am not guilty of. If my hon. Friend cares to read my speech in December, he will see that I am in favour of industrial tribunals, but the completely reformed variety, which takes all the legalism out of it.
      Mr. Trippier: All right. So we are getting a little clearer now. My hon. Friend is in favour of reformed industrial tribunals but in the main Opposition Members are in favour of industrial tribunals—
      Ms. Clare Short rose—
      Mr. Trippier: I shall happily give way to the hon. Lady. She knows I always do.
      We should not try to find some new form of cemented relationship between Opposition Members and my hon. Friend the Member for Langbaurgh on this issue. It is clear that Conservative Members and Opposition Members do not agree about industrial tribunals. We all know, if we
      750
      were to put our hands on our hearts, that these tribunals protect the worker more than the employer in the vast majority of cases.
      6.30 pm
      Ms. Clare Short: The Opposition, and I assume the Minister, are in favour of the existence of industrial tribunals. However, we do not think that it is right that workers should be forced to go to industrial tribunals to get basic justice and to prove their innocence. We believe that there should be reasonable law and reasonable industrial practices.
      The Opposition are worried—I believe that the hon. Member for Langbaurgh agrees with us on this—although there may be disagreement between the hon. Gentleman and the Opposition about part II of the Bill—about the increase in legalism, the use of lawyers and the high expense of going to industrial tribunals. The original intention of these tribunals was that they would provide a cheap and informal procedure.
      Mr. Trippier: Industrial tribunals are cheap and informal procedures. I agree with the hon. Member for Birmingham, Ladywood (Ms. Short) that industrial tribunals are good, although my hon. Friend the Member for Langbaurgh does not appear to share that view. My hon. Friend the Member for Langbaurgh does not seem to believe in deductions; at least, that is what I understood from his speech. I presume that Opposition Members do not agree with the deductions either. That is very strange because the present legislation allows deductions to be made, conceivably up to a limit of 100 per cent. However, with this Bill we are building in added protection for the worker.
      Opposition Members have suggested that the amendments we are considering will withdraw protection from the worker. That is not the case. Opposition Members have argued that the present legislation dating back to 1896 should continue. That is absolute nonsense. There is no logic in the argument that the present legislation should continue. It is clear from the first few clauses in this part of the Bill that we are desperately trying to protect the workers. We are especially trying to do that in relation to workers in the retail trade.
      Part 1 of the Bill provides that deductions from wages or payments by workers to employers are lawful only if they are authorised by statute, by the contract of employment or by written agreement of the worker. No one has mentioned that last point so far in the debate.
      Mr. Eastham: I did.
      Mr. Trippier: I apologise to the hon. Gentleman, I could not have heard him say that.
      In addition, there are special controls of deductions relating to cash shortages or stock deficiencies and the worker has a right to complain to a tribunal about an unlawful deduction. There should be such a right. We shall move the amendment today to strengthen those controls and to ensure that workers have a copy or a written explanation of the contractual terms authorising deductions. That point was drawn to my attention in Committee by the hon. Member for Bow and Poplar. The amendments will introduce a time limit on deductions relating to cash shortages or stock deficiencies and I readily accepted that point in Committee.
      In Part 1 of the Bill, we already have a substantial body of controls based on the philosophy that it is best to allow

      751
      the parties involved to sort out a regime for themselves to control deductions from wages, to ensure that the regime is clearly understood and enforced.
      Dr. Godman: As the Minister will know, I was not a Member of the Standing Committee. However, I have been present throughout the debate today. The Minister used the phrase "added protection given to employees". How will the Minister publicise that protection? Will his Department produce and distribute a code of practice on that point?
      Mr. Trippier: It is certainly our intention to increase awareness of the new proposals that will follow when the Bill reaches the statute book. In our Department, we consider ourselves to be pretty good at that. We will go to extreme lengths to ensure that people are aware of the new regime. That point was raised in Committee and I understand why the hon. Member for Greenock and Port Glasgow (Dr. Godman) should wish to raise it again. We are anxious to increase awareness not only for employees but for employers. Any changes will obviously make significant differences to the running of firms.
      Ms. Clare Short: Will the Minister give way?
      Mr. Trippier: I would like to deal with the specific point that the hon. Lady raised in her previous intervention. I shall deal with that point and then give way.
      I must stress that 75 per cent. of cases which are intended to go to tribunals are settled before they reach a hearing. I understand that Opposition Members would always try to convince the House that it is more of a strain and inconvenience for workers to go to a tribunal than the employer. I can understand that and in some cases I believe that that is true. However, I have always argued that it is more of a strain on the employer. The evidence of the number of cases that are settled prior to an industrial tribunal bears that out.
      I am also convinced from the consultation exercise that we undertook that the industrial tribunal is a disincentive to increasing employment in the private sector. I accept that my hon. Friend the Member for Langbaurgh made that point in Committee. Private sector firms obviously do not want to suffer the hassle and trouble of going to an industrial tribunal.
      I believe on balance that it is more of a disincentive to the employer than it is to the worker.
      Mr. Eastham: I am sure that the Minister will recall that, when we made our observations on this clause in Committee, we contended that employers did not need to go to tribunals. They could simply go to the police. If the staff were found to be breaking the law there could be an inquiry and the employer could have recourse to a proper court of law. Such an action would not cost the Minister's Department anything.
      Mr. Trippier: The hon. Gentleman has missed the point that I was trying to make in Committee. There are many instances in which an employer may choose to discipline a member of his work force but he may not wish to go to the extent of dismissing that member of staff. The member of staff may have committed an offence that would be punishable in a court of law. However, the employer might choose not to pick up the telephone and call the police and all that that means. The hon. Member for Manchester, Blackley must have known employers who are decent in that way and I am sure that many hon.
      752
      Members have acted in a similar manner to give someone another chance. An employer may sometimes choose not to call in the law. However, he may want to exercise the disciplinary powers that are available in the contract. That point has not been made so far in the debate—the powers must be in the contract. All hon. Members, irrespective of political persuasion, should welcome the fact that in some instances matters do not have to be taken to the police.
      Ms. Clare Short: I believe that it was the hon. Member for Mid-Kent (Mr. Rowe) who suggested in Standing Committee that ACAS might be asked to draw up a recommended contract covering the Minister's points. Speaking from memory, I believe that the Minister said that he thought that that was a useful suggestion and that he would consider it. That suggestion paralleled the proposal from my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) that there should be a code of practice. I hope that the Minister will proceed with that point and not forget it.
      Mr. Trippier: That is a fair point to make. I seem to remember the exchange of views that we had on these matters in Committee, and I will certainly bear that point in mind. If I did not make it crystal clear, and if this point is not obvious in the Hansard record of the Committee, I will say that it would be a good idea to have a draft form of contract prepared by ACAS. That point should be made known to increase awareness.
      Five principal issues are dealt with in this set of amendments and the new clause. First, it is proposed that all deductions for disciplinary purposes should be limited to 10 per cent. of gross wages.
      Of course, the Government have introduced such limits to control deductions related to cash shortages and stock deficiencies, as that is the area of contemporary concern and abuse.
      Mr. Mikardo: Rubbish.
      Mr. Holt: If a pieceworker botches up an entire lot that he has been given to manufacture, whatever it is, will he still be paid 90 per cent. and have only a disciplinary stricture of 10 per cent.?
      Mr. Trippier: My hon. Friend could not be more wrong. I assume that my hon. Friend is talking about a pieceworker in manufacturing industry, not in the retail business. If it is in the contract that deductions can be made, the Bill's provision to limit deductions to 10 per cent. on pay day will not apply. That does not apply outside the retail sector. I shall try to develop that.
      The hon. Member for Bow and Poplar said, sotto voce, that it is rubbish that evidence shows that there is abuse. I must assure him that that is the case. In the consultation exercise, to which I referred on a number of occasions in Committee, the evidence was clear. The hon. Gentleman gave the House examples of what could happen in certain instances, but there is no evidence that that has proved to be a problem. But, trying to be reasonable, as I have endeavoured to be with the hon. Gentleman throughout, if there were evidence that that was causing concern, obviously I would look at it. Incidentally, the situation that he described exists at the moment under the present law. I am sure that he understands that. I cannot put it any clearer. We are changing that situation but still building in the protection for the worker.
      Mr. Mikardo: As we are legislating we should improve conditions and there is no improvement here. Under the present law and under the Bill, I repeat, a worker can have a deduction made for a shortage that does not exist or for a shortage that does exist for which he is not in the least responsible. What sort of a condition is that? Why are we not legislating to get rid of that gross injustice?
      Mr. Trippier: As I have said, and as I know that the hon. Gentleman will recognise, we have tried desperately in the Bill to strike a fair balance. We must recognise on the one hand that employers who are concerned about cash deficiencies and stock shortages will not take on more people unless they have the power to deduct. Many would say that, rather than press ahead with running a business which is so much of an encumbrance and becoming incredibly bureaucratic, thanks to the Government introducing so much legislation which acts as a brake on enterprise, they will not go ahead. They will pack up. If they have any money left they will invest it in gilt-edged stocks in the stock exchange.
      Mr. Nellist rose—
      Mr. Trippier: I am desperately trying to get on. I have allowed a number of interventions.
      The hon. Member for Bow and Poplar referred to the Lord Chief Justice. The situation that the hon. Gentleman described is exactly the same. If the employer is to have the right of making deductions from pay taken away from him, he will not take on more workers. That is a lifeline for those businesses that are dealing with cash. We have given all sorts of examples of garage forecourts, cigarette kiosks and so on. If those who operate such businesses—hon. Members should be glad of them because they are serious employers—do not have the right to make deductions, they will simply say that because of the problems that they have experienced—there is evidence of them—they will simply not carry on running such businesses. That is the sad and tragic alternative.
      6.45 pm
      I still say that it is better to leave disciplinary procedures and general limits on disciplinary deductions to be determined between employers, workers and trade unions, again short of dismissing people. That is a good alternative. Under the Bill, a worker suffering a disciplinary deduction can complain to a tribunal if he has not agreed or consented to it and if it was not provided for in his contract. That is surely sufficient protection.
      Mr. Michael J. Martin: The Minister mentioned industrial tribunals and the fact that workers can go to them. He must know that a tribunal can award against an employee going to it if it feels that the claim was not justified. Therefore, the Minister is not giving the full facts to the House when he says that a person can go to an industrial tribunal, when he knows that if he goes along that particular road he runs a risk of having to pay the employer's costs, legal fees and whatever other expenses have been incurred.
      Mr. Trippier: I know that the hon. Gentleman would never wittingly seek to mislead the House, but he must make it clear that the number of instances where that has arisen are minuscule. To comply with the law as it is now—nothing to do with the Truck Acts—that complaint must be frivolous or vexatious. Only a handful of people
      754
      have been treated in that way and both of us should be glad about that. However, the evidence that I have brought to the House today that 75 per cent. of claims are settled outside a tribunal is more compelling than anything I have heard from the Opposition.
      Mr. Holt: My hon. Friend must realise that what he is doing will affect many millions of people for many years. We are talking at this moment about industrial tribunals and vexatious or frivolous aspects. Most of the cases where the appellant has been found guilty by the "tribunal" and forced to pay have been where there has been a pre-hearing assessment which has gone against the appellant but the appellant has nevertheless proceeded with the case to tribunal. I have not heard whether the pre-hearing assessment scene will be introduced into this and whether, if an employee feels that he has been unjustly treated, there will be a pre-hearing assessment. I have not read or seen any of that in the Bill.
      Mr. Trippier: The simple answer is that it will be. There has to be a pre-hearing assessment and my hon. Friend is right to refer to it. That will be broadly welcomed. It is perhaps a little amazing that we did not discuss that at some length in Committee, but we did not. My hon. Friend is right and I am glad to give him that assurance.
      As I said, a balance must be struck. The more employees and workers are tied up in statutory controls, limiting what they can agree to in their contract, the more likely it is that employers will be reluctant to take on workers or will resort to dismissals rather than deductions.
      The balance is about right in the Bill, given that we are proposing some amendments which have been brought forward in a real attempt to meet the concerns expressed by Opposition Members. That I am anxious to do, but I strongly recommend that the House rejects these amendments.
      Ms. Clare Short: In the spirit of the strange love-hate relationships that are developed in Committee stages, may I pay the Minister an inverted compliment by saying that he is not at his best today.
      The Minister said that the Government were trying desperately to protect workers. That is just not true. The consensus is that the Truck Acts have inadequacies but provided better protection than what is being put in their place. The Minister's only argument—I do not believe it—is that employers say that if they are not given more powers to deduct pay, they will not take on more workers. I challenge the Minister to provide me with any evidence of his claim that employers have told the Department of Employment, "We can't take on any more workers unless we have more powers to deduct."
      Employers have powers under existing law to deduct up to 100 per cent. of wages. Under the Bill they may deduct up to 100 per cent. of wages except in relation to stock shortages or cash defficiencies in the retail sector. The Minister cannot pretend that the Bill improves protection.
      Mr. Trippier: I was not arguing that employers were saying that they should have wider powers to make deductions. We all agree that they have considerable powers at the moment. We are restricting those powers by limiting deductions in the retail sector to 10 per cent. We believe that it is abhorrent that workers could face

      755
      deductions that were so substantial that their net take-home pay would be next to nothing. We believe that to be immoral; that is why we are introducing the legislation.
      Ms. Short: As long as Hansard is not interfered with, it will show tomorrow what the Minister said. I wrote down his words as he said them, because this is the first time that he has introduced the argument. I do not believe his claim and my challenge stands. He said, "Employers will not take on more people unless they have power to deduct."
      Employers already have the power to deduct money from workers' wages. The Government must justify their legislation, and part of the Minister's justification was to say that employers throughout the land were knocking at his door saying that they could not take on more workers unless they had the power to deduct money from their wages. I do not believe that employers have said that to the Minister.
      The Minister suggested that a balance had to be struck, and we agree with him. However, the balance in the Truck Acts was a much fairer and more just balance. The balance struck in the Bill is grossly unjust. Workers who are not guilty of any dishonesty and may even be able to prove that they are not guilty of dishonesty may be subject to deductions and fines. The only way for them to clear their reputation, let alone get their money back, is for them to lose time and money in going to an industrial tribunal. We have just heard that there is to be a pre-hearing assessment, which will mean two days off work instead of one.
      Even if workers prove to a tribunal that they were innocent of any act or omission leading to a loss, but their contract states that they may be subject to a deduction if there is a loss, the tribunal will not be able to reverse the deduction. If the workers win, they will get back only the money deducted from their wages. There will be no compensation for the cost of going to the tribunal and no compensation for the hurt and damage to the characters of those who are accused of being liars. In addition, the employer will have the right to dismiss workers whom he has not employed for at least two years or five years—depending on whether they are employed full-time or parttime—if he is aggrieved by the fact that they took him to a tribunal.
      The Bill is an outrage. It is unjust and it will lead to more deductions and fines in the worst organised sectors of our work force. It will also lead to increased conflict and a greater sense of injustice. The Minister should have left the old law alone if he could do no better than this Bill. We reject this part of the Bill and I hope that all my hon. Friends and decent Conservative Members will vote for the new clause.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 192, Noes 249.

      Division No. 178]

      [6.53 pm

      AYES

      Abse, Leo

      Banks, Tony (Newham NW)

      Adams, Allen (Paisley N)

      Barnett, Guy

      Alton, David

      Barron, Kevin

      Anderson, Donald

      Beckett, Mrs Margaret

      Archer, Rt Hon Peter

      Bell, Stuart

      Ashdown, Paddy

      Bermingham, Gerald

      Ashley, Rt Hon Jack

      Bidwell, Sydney

      Ashton, Joe

      Blair, Anthony

      Atkinson, N. (Tottenham)

      Boothroyd, Miss Betty

      Bagier, Gordon A. T.

      Boyes, Roland

      756

      Bray, Dr Jeremy

      Kirkwood, Archy

      Brown, Gordon (D'f'mline E)

      Lambie, David

      Brown, Hugh D. (Provan)

      Lamond, James

      Brown, R. (N'c'tle-u-Tyne N)

      Leadbitter, Ted

      Brown, Ron (E'burgh, Leith)

      Leighton, Ronald

      Bruce, Malcolm

      Lewis, Terence (Worsley)

      Buchan, Norman

      Litherland, Robert

      Caborn, Richard

      Livsey, Richard

      Callaghan, Jim (Heyw'd & M)

      Lloyd, Tony (Stretford)

      Campbell-Savours, Dale

      Lofthouse, Geoffrey

      Canavan, Dennis

      McDonald, Dr Oonagh

      Carlile, Alexander (Montg'y)

      McKay, Allen (Penistone)

      Carter-Jones, Lewis

      McKelvey, William

      Clarke, Thomas

      MacKenzie, Rt Hon Gregor

      Clay, Robert

      Maclennan, Robert

      Clelland, David Gordon

      McNamara, Kevin

      Clwyd, Mrs Ann

      McTaggart, Robert

      Cocks, Rt Hon M. (Bristol S)

      Madden, Max

      Cohen, Harry

      Marek, Dr John

      Conlan, Bernard

      Marshall, David (Shettleston)

      Cook, Frank (Stockton North)

      Martin, Michael

      Cook, Robin F. (Livingston)

      Mason, Rt Hon Roy

      Corbyn, Jeremy

      Maxton, John

      Craigen, J. M.

      Maynard, Miss Joan

      Cunliffe, Lawrence

      Meacher, Michael

      Cunningham, Dr John

      Meadowcroft, Michael

      Dalyell, Tam

      Michie, William

      Davies, Rt Hon Denzil (L'lli)

      Mikardo, Ian

      Davis, Terry (B'ham, H'ge H'l)

      Millan, Rt Hon Bruce

      Deakins, Eric

      Miller, Dr M. S. (E Kilbride)

      Dewar, Donald

      Morris, Rt Hon A. (W'shawe)

      Dobson, Frank

      Nellist, David

      Dormand, Jack

      Oakes, Rt Hon Gordon

      Douglas, Dick

      O'Brien, William

      Dubs, Alfred

      O'Neill, Martin

      Duffy, A. E. P.

      Orme, Rt Hon Stanley

      Dunwoody, Hon Mrs G.

      Owen, Rt Hon Dr David

      Eadie, Alex

      Park, George

      Eastham, Ken

      Parry, Robert

      Edwards, Bob (W'h'mpt'n SE)

      Patchett, Terry

      Evans, John (St. Helens N)

      Pavitt, Laurie

      Ewing, Harry

      Pendry, Tom

      Faulds, Andrew

      Penhaligon, David

      Field, Frank (Birkenhead)

      Pike, Peter

      Flannery, Martin

      Powell, Raymond (Ogmore)

      Foot, Rt Hon Michael

      Prescott, John

      Forrester, John

      Radice, Giles

      Foster, Derek

      Randall, Stuart

      Fraser, J. (Norwood)

      Redmond, Martin

      George, Bruce

      Rees, Rt Hon M. (Leeds S)

      Gilbert, Rt Hon Dr John

      Richardson, Ms Jo

      Godman, Dr Norman

      Roberts, Allan (Bootle)

      Golding, John

      Roberts, Ernest (Hackney N)

      Gourlay, Harry

      Robertson, George

      Hamilton, James (M'well N)

      Robinson, G. (Coventry NW)

      Hamilton, W. W. (Fife Central)

      Rogers, Allan

      Hancock, Michael

      Rooker, J. W.

      Hardy, Peter

      Ross, Ernest (Dundee W)

      Harrison, Rt Hon Walter

      Ross, Stephen (Isle of Wight)

      Hart, Rt Hon Dame Judith

      Rowlands, Ted

      Healey, Rt Hon Denis

      Ryman, John

      Heffer, Eric S.

      Sedgemore, Brian

      Hogg, N. (C'nauld & Kilsyth)

      Sheerman, Barry

      Holland, Stuart (Vauxhall)

      Sheldon, Rt Hon R.

      Home Robertson, John

      Shields, Mrs Elizabeth

      Howells, Geraint

      Shore, Rt Hon Peter

      Hoyle, Douglas

      Short, Ms Clare (Ladywood)

      Hughes, Dr Mark (Durham)

      Short, Mrs R.(W'hampt'n NE)

      Hughes, Robert (Aberdeen N)

      Silkin, Rt Hon J.

      Hughes, Roy (Newport East)

      Skinner, Dennis

      Hughes, Sean (Knowsley S)

      Smith, (Isl'ton S & F'bury)

      Hughes, Simon (Southwark)

      Snape, Peter

      Janner, Hon Greville

      Spearing, Nigel

      John, Brynmor

      Steel, Rt Hon David

      Johnston, Sir Russell

      Stewart, Rt Hon D. (W Isles)

      Jones, Barry (Alyn & Deeside)

      Strang, Gavin

      Kaufman, Rt Hon Gerald

      Straw, Jack

      Kennedy, Charles

      Thomas, Dr R. (Carmarthen)

      Kilroy-Silk, Robert

      Thorne, Stan (Preston)

      Kinnock, Rt Hon Neil

      Tinn, James

      757

      Torney, Tom

      Wilson, Gordon

      Wallace, James

      Winnick, David

      Wareing, Robert

      Wrigglesworth, Ian

      Weetch, Ken

      Young, David (Bolton SE)

      Welsh, Michael

      White, James

      Tellers for the Ayes:

      Wigley, Dafydd

      Mr. Don Dixon and Mr. Frank Haynes.

      Williams, Rt Hon A.

      NOES

      Aitken, Jonathan

      du Cann, Rt Hon Sir Edward

      Alexander, Richard

      Durant, Tony

      Amess, David

      Dykes, Hugh

      Ashby, David

      Edwards, Rt Hon N. (P'broke)

      Aspinwall, Jack

      Eggar, Tim

      Atkins, Rt Hon Sir H.

      Evennett, David

      Atkins, Robert (South Ribble)

      Eyre, Sir Reginald

      Atkinson, David (B'm'th E)

      Fallon, Michael

      Baker, Rt Hon K. (Mole Vall'y)

      Farr, Sir John

      Baker, Nicholas (Dorset N)

      Favell, Anthony

      Baldry, Tony

      Finsberg, Sir Geoffrey

      Banks, Robert (Harrogate)

      Fookes, Miss Janet

      Batiste, Spencer

      Forman, Nigel

      Bellingham, Henry

      Forth, Eric

      Bendall, Vivian

      Fowler, Rt Hon Norman

      Bennett, Rt Hon Sir Frederic

      Fox, Marcus

      Benyon, William

      Fry, Peter

      Best, Keith

      Gale, Roger

      Bevan, David Gilroy

      Galley, Roy

      Biffen, Rt Hon John

      Gardiner, George (Reigate)

      Biggs-Davison, Sir John

      Gardner, Sir Edward (Fylde)

      Blackburn, John

      Garel-Jones, Tristan

      Blaker, Rt Hon Sir Peter

      Glyn, Dr Alan

      Body, Sir Richard

      Goodhart, Sir Philip

      Bonsor, Sir Nicholas

      Goodlad, Alastair

      Boscawen, Hon Robert

      Gow, Ian

      Bottomley, Mrs Virginia

      Gower, Sir Raymond

      Bowden, A. (Brighton K'to'n)

      Grant, Sir Anthony

      Braine, Rt Hon Sir Bernard

      Gregory, Conal

      Brandon-Bravo, Martin

      Griffiths, Sir Eldon

      Bright, Graham

      Griffiths, Peter (Portsm'th N)

      Brinton, Tim

      Grist, Ian

      Brittan, Rt Hon Leon

      Ground, Patrick

      Brown, M. (Brigg & Cl'thpes)

      Grylls, Michael

      Browne, John

      Hamilton, Hon A. (Epsom)

      Bruinvels, Peter

      Hamilton, Neil (Tatton)

      Bryan, Sir Paul

      Hampson, Dr Keith

      Buck, Sir Antony

      Hanley, Jeremy

      Budgen, Nick

      Harris, David

      Bulmer, Esmond

      Harvey, Robert

      Burt, Alistair

      Haselhurst, Alan

      Butcher, John

      Havers, Rt Hon Sir Michael

      Butler, Rt Hon Sir Adam

      Hawkins, C. (High Peak)

      Butterfill, John

      Hawkins, Sir Paul (N'folk SW)

      Carlisle, John (Luton N)

      Hawksley, Warren

      Carlisle, Kenneth (Lincoln)

      Hayes, J.

      Carlisle, Rt Hon M. (W'ton S)

      Hayhoe, Rt Hon Barney

      Carttiss, Michael

      Hayward, Robert

      Cash, William

      Heathcoat-Amory, David

      Chalker, Mrs Lynda

      Heddle, John

      Chapman, Sydney

      Hickmet, Richard

      Chope, Christopher

      Hicks, Robert

      Churchill, W. S.

      Higgins, Rt Hon Terence L.

      Clark, Dr Michael (Rochford)

      Hind, Kenneth

      Clark, Sir W. (Croydon S)

      Hogg, Hon Douglas (Gr'th'm)

      Clarke, Rt Hon K. (Rushcliffe)

      Holland, Sir Philip (Gedling)

      Clegg, Sir Walter

      Hordern, Sir Peter

      Cockeram, Eric

      Howarth, Gerald (Cannock)

      Colvin, Michael

      Howell, Ralph (Norfolk, N)

      Conway, Derek

      Hubbard-Miles, Peter

      Cope, John

      Hunt, David (Wirral W)

      Couchman, James

      Hunter, Andrew

      Cranborne, Viscount

      Hurd, Rt Hon Douglas

      Critchley, Julian

      Irving, Charles

      Crouch, David

      Jackson, Robert

      Currie, Mrs Edwina

      Jones, Gwilym (Cardiff N)

      Dickens, Geoffrey

      Jopling, Rt Hon Michael

      Dicks, Terry

      Joseph, Rt Hon Sir Keith

      Dorrell, Stephen

      Key, Robert

      Dover, Den

      King, Roger (B'ham N'field)

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      Knight, Greg (Derby N)

      Shepherd, Richard (Aldridge)

      Knight, Dame Jill (Edgbaston)

      Skeet, Sir Trevor

      Knowles, Michael

      Smith, Tim (Beaconsfield)

      Knox, David

      Soames, Hon Nicholas

      Lang, Ian

      Speed, Keith

      Latham, Michael

      Speller, Tony

      Lawler, Geoffrey

      Spencer, Derek

      Lawrence, Ivan

      Spicer, Jim (Dorset W)

      Leigh, Edward (Gainsbor'gh)

      Squire, Robin

      Lester, Jim

      Stanbrook, Ivor

      Lilley, Peter

      Stanley, Rt Hon John

      Lloyd, Ian (Havant)

      Steen, Anthony

      Lloyd, Peter (Fareham)

      Stern, Michael

      MacKay, Andrew (Berkshire)

      Stevens, Lewis (Nuneaton)

      McLoughlin, Patrick

      Stewart, Andrew (Sherwood)

      McNair-Wilson, M. (N'bury)

      Stewart, Ian (Hertf'dshire N)

      Major, John

      Stokes, John

      Maples, John

      Stradling Thomas, Sir John

      Marlow, Antony

      Sumberg, David

      Mates, Michael

      Taylor, John (Solihull)

      Mather, Carol

      Taylor, Teddy (S'end E)

      Maude, Hon Francis

      Temple-Morris, Peter

      Mayhew, Sir Patrick

      Terlezki, Stefan

      Mellor, David

      Thomas, Rt Hon Peter

      Merchant, Piers

      Thompson, Patrick (N'ich N)

      Miller, Hal (B'grove)

      Thornton, Malcolm

      Miscampbell, Norman

      Thurnham, Peter

      Moate, Roger

      Townend, John (Bridlington)

      Neale, Gerrard

      Trippier, David

      Neubert, Michael

      Trotter, Neville

      Newton, Tony

      Twinn, Dr Ian

      Onslow, Cranley

      van Straubenzee, Sir W.

      Osborn, Sir John

      Vaughan, Sir Gerard

      Ottaway, Richard

      Viggers, Peter

      Pawsey, James

      Waddington, David

      Percival, Rt Hon Sir Ian

      Walden, George

      Porter, Barry

      Waller, Gary

      Portillo, Michael

      Ward, John

      Powell, William (Corby)

      Wardle, C. (Bexhill)

      Powley, John

      Watson, John

      Pym, Rt Hon Francis

      Watts, John

      Rathbone, Tim

      Wells, Bowen (Hertford)

      Rhodes James, Robert

      Wells, Sir John (Maidstone)

      Rhys Williams, Sir Brandon

      Whitfield, John

      Ridley, Rt Hon Nicholas

      Wiggin, Jerry

      Robinson, Mark (N'port W)

      Wilkinson, John

      Roe, Mrs Marion

      Winterton, Mrs Ann

      Rossi, Sir Hugh

      Winterton, Nicholas

      Rost, Peter

      Wolfson, Mark

      Rowe, Andrew

      Wood, Timothy

      Rumbold, Mrs Angela

      Yeo, Tim

      Sackville, Hon Thomas

      Sainsbury, Hon Timothy

      Tellers for the Noes:

      Sayeed, Jonathan

      Mr. Donald Thompson and Mr. Mark Lennox-Boyd.

      Shaw, Giles (Pudsey)

      Shelton, William (Streatham)

      Question accordingly negatived.

    New Clause 10

      PAYMENT IN CASH
      'No worker who is currently paid in cash shall cease to be so paid without his or her consent.'.—[Mr. Eastham]
      Brought up, and read the First time.
      Mr. Eastham: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Sir Paul Dean): With this, it will be convenient to discuss amendment No. 53, in Clause 11, page 11, line 40, at end insert
      'except that no worker currently paid in cash shall cease to be so paid without agreement'.
      Mr. Eastham: By moving new clause 10 and discussing with it amendment No. 53, the Opposition are

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      attempting to amend clause 11. I preface my remarks by saying that we recognise that millions of workers who are paid by cheque through their banks find it a completely satisfactory method. We do not propose to change that procedure. All we say is that workers should be given a choice.
      The Bill gives employers all the options. The employee has virtually no say about the way in which he shall be paid. The Bill deals not with highly paid workers but with the lowest paid. It affects 2,750,000 workers. A total of 41 per cent. of workers covered by wages councils are below the European decent wage threshold. Four out of five workers in wages council industries are women. Often people say that women work just for pin money, but that is not so. Low-paid workers are desperately in need of their jobs and reasonable pay.
      In our earlier debate we reminded the Minister that the Government are turning the clock back more than 150 years to the time of the Truck Acts. They were introduced to counter the dishonesty, greed and malpractices of some employers. If the Government have their way I fervently believe that once again corruption will occur. We say not that all employers are corrupt or bad, but that some are unscrupulous and must be controlled by legislation.
      On Second Reading the Minister tried to justify taking away payments in cash. He said that better security would result. That is a fact. Security will be greater because no cash handling will be involved. The Minister said that employers would save up to 50p per payment if transactions went through the banks. The employer will save money, but no consideration has been given to providing matching benefits for the employee.
      In the two and a half months that we considered the Bill in Committee, we were furnished with numerous documents. One of them was from the National Association of Citizens Advice Bureaux dealing with this aspect of the Bill. It is not a political organisation and it is therefore fair to quote some of its comments. It has an unbiased opinion in the interest of the people to whom we are referring.
      The document states:
      "In 1984–85 the Citizens Advice Bureaux service dealt with over 6 million enquiries: of these, 600,000 related to employment problems. A substantial proportion of employment enquiries concerned deductions from pay, non-cash wages and low pay."
      Dealing directly with the right to be paid in cash the document continues:
      "Citizens Advice Bureaux deal with a considerable number of people working in low-paid employment and dependent upon weekly cash wages. Many such people are unable to open a bank or building society account and even if it were possible they would find the cost of running such an account prohibitive … employees should retain the option to be paid in cash."
      The document makes some further worthy observations. It states:
      "Bureaux throughout the country have urged us to repeat the recommendation made in our original evidence paper for all employees to have the option to be paid in cash. Bureaux' experience has shown that serious practical problems do arise for people on low incomes when they no longer receive their wages in cash."
      7.15 pm
      The main points made by the bureaux are as follows:
      "As a matter of principle, … all employees should be free to use the method of payment best suited to their needs. Many CAB clients do not have a bank account and few have post office savings or building society accounts. A direct change to payment into one of these can cause particular difficulties.
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      Those who have had problems in the past with regard to credit and are perhaps on a black list, may not he able to open a bank account. Many clients, particularly in rural areas, do not have any easy access to banks, post offices and building societies. They may be far away and only open during working hours.
      Many clients without accounts have experienced hardship because of the difficulty in trying to cash cheques or crossed giros … The cost of getting to and from the place where cash can be drawn may be high …
      In several cases salary cheques have not been met when presented for encashment because the employer did not have sufficient cash in his account. This can be costly for the employee who will be charged for a returned cheque and consequently may incur additional bank charges. In addition an employee will suffer hardship if wages are not received on time.
      There may also be some delays between payment being made by cheque and it being cleared, which can cause hardship ….
      Some clients would have difficulty in operating a bank account. People on low incomes may depend upon cash-in-hand to maintain their budget and earn too little to allow flexibility.
      In cases where transition to credit transfer has been made employees may be forced to move from weekly to monthly payments. Where the employer does not make provision for the change, the effect upon the household budget can be drastic. The attitude shown by banks towards credit can push people on low incomes into debt; there are two aspects of this:
      The ease with which credit can be obtained has forced many clients into debt, often for the first time.
      Banks may take unfair advantage of their creditor status and may make direct deductions for overdraft and loans. This can cause hardship, especially to those trying to clear several debts."
      Those are some of the submissions and objections expressed by citizens advice bureaux throughout the country. They make a logical and compelling case and support our belief that the worker should be allowed to choose.
      One or two points have not yet been mentioned in the debate. It is not uncommon for mistakes to be made in wage calculations, whether computerised or manual. Employees paid in cash can go to the wages office and have the mistake rectified immediately. The cashier will usually hand over any deficiency in the pay packet. If employees are now to be paid by bank transfer, it will take time to authorise an additional payment to rectify a mistake, and that will cause problems for employees.
      It is worth emphasising that some worker groups, especially the low paid, are not familiar with banking methods and may find it difficult to keep tabs on their bank statements. Low-paid workers may not be as conscious of deficiencies in their wages. In Committee, the Minister admitted that wages inspectors had discovered underpayments of £11·9 million over a five-year period. He hastened to add that 80 per cent. of that had been retrieved. However, the number of wages inspectors is to be reduced by as much as 50 per cent., so I fear that underpayments will not be discovered and retrieved.
      There is a possibility—even a probability—of further and greater underpayment as a result of the banking method that workers are to have forced upon them.
      Mr. Holt: The hon. Gentleman is becoming thoroughly confused when talking about underpayments and mistakes in calculations. The anomalies that the wages inspectors found were deliberate underpayments by employers and contraventions of wages councils' rules. Mistakes in calculation computing do not total £11·9 million.
      Mr. Eastham: Whether it is a mistake in calculation or a deliberate underpayment, the suffering is the same for

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      low-paid workers. I am concerned not about the reason for any deficiency, but about workers receiving their full entitlement.
      Mr. Nellist: When genuine mistakes are made in the wages of workers in wages councils industries, where employees are paid weekly in cash, they are put right within a week. The system proposed in the Bill allows employers to use monthly bank transfers, so mistakes would take a month to rectify.
      Mr. Eastham: My hon. Friend is correct. We are talking about workers earning only £55, £65 or £75 a week, when the average weekly manual wage is £165 or £170 a week.
      Mr. Holt: With respect, we are not talking about that. It does not help the hon. Gentleman's case to make false statements. This legislation covers everyone's cash payment up to any figure—it does not cover only low-paid workers. The hon. Gentleman must please get this right.
      Mr. Eastham: I accept that the Bill covers all manual workers, but I am emphasising the position of the low-paid. Hardship is greater among them than among those earning £160 or £170 a week. We must concentrate our attention on that.
      As my hon. Friend the Member for Coventry, South-East (Mr. Nellist) said, the switch from weekly to monthly pay will be agonising for some groups of workers. The difficulty will be compounded because of low wages and the difficulty of even trying to earn a living. All fair-minded people must be concerned about the effects of the Bill, and especially about this clause which will cause extreme hardship to the low paid.
      Mr. Caborn: Does my hon. Friend agree that many shift workers, especially those paid late on a Friday night, will find the proposed system very difficult? Currently they receive cash in the hand, which they can give to their wives for the week-end shopping.
      Does my hon. Friend further agree that no one—the trade unions, industry, the CBI or the banks—wants the course proposed in the Bill? Does it not show the illiteracy of the Government in dealing with industry?
      Mr. Eastham: My hon. Friend is correct in all that he says. The Minister said in Committee that facilities were available for those who were unable to get to the bank before it closed. He said that, for example, they could go to the Post Office. However, the Post Office has now said that a charge of 50p will be made to cash cheques on a Saturday morning. People may be faded with all sorts of charges when trying to obtain their wages. At present, a worker receives his pay packet on pay day and he faces no charges. Conservative Members may say that free banking is available provided one stays in credit, but there is no guarantee that the banks will not change their policy. A banking crisis might result in a charge of 25p for every withdrawal, which will mean that the low paid will suffer a wage reduction.
      It seems that the Government are intent on giving rights only to employers. Employers will be able to tell their workers, "From next month you will be paid through the bank, and not in cash." A worker's bank may be 12 miles from his village, he might find that after six months he
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      incurs bank charges in obtaining his wages and the employer may decide to introduce monthly pay instead of weekly pay. There is no provision in the clause to oblige the employer to make compensatory allowances to tide over the worker who is to receive no wages for three weeks. Employees are being denied a choice, and that is why we have tabled the clause.
      7.30 pm
      The Bill deteriorates clause by clause. It is a Robin-Hood-in-reverse Bill. The Government are seeking to rob the poor to give to the rich. The emphasis is in one direction, and certainly not towards employees. For these reasons, I hope that the House will support the clause.
      Mr. Gordon Oakes: I support strongly the arguments advanced by my hon. Friend the Member for Manchester, Blackley (Mr. Eastham). It is a modest new clause. The Bill—especially clause 11, which will abolish the Truck Acts—will cause heartbreak in many tens of thousands of families. In working-class households there is something almost mystical about the pay packet. The employee has worked for the week, and has worked hard. He has put in his hours and as a reward he receives the coin of the realm in a packet. The pay packet has a great significance to many working-class families. The new clause does not provide that all workers should be entitled to payment in cash. It provides merely that those who have been paid in coin of the realm throughout their working lives shall continue to be paid in that way if they so desire.
      I have no doubt that the Government will say that there are many anomalies in the Truck Acts, some of which go back to 1831. That may be. It may be right that the anomalies should be ironed out, but we must not throw away the baby with the bath water, which is what the Government are trying to do in clause 11.
      My hon. Friend the Member for Coventry South-East (Mr. Nellist) talked about the pay packet and mistakes or otherwise, but I do not wish to talk about the employer who tries deliberately to mislead and to defraud his employee. Let us say that a mistake is made by someone in the accounting department and a man or a woman receives the wrong wages. When the employee receives his pay packet, he will open it and read the statement. If there is an error, he will be in the pay office within 10 minutes of receiving the pay packet. He will not be able to do that at the end of the month when he receives his bank statement, and he may well be in that position as a result of the Bill.
      Mr. Andrew Rowe (Mid-Kent): I am not clear how monthly payments have come to feature in the debate. There is nothing in the Bill to suggest that payments will be made monthly. Surely it is open to an employer to pay weekly or monthly.
      Mr. Oakes: I have never suggested that the employee will be paid monthly. I do not know the hon. Gentleman's bank, but I receive a monthly statement. I am never supplied with a weekly statement. I have no doubt that I would be supplied with a weekly statement if I requested it, but it would be necessary to ask specifically for that arrangement. The banks will not want the scheme that is envisaged in the Bill if it will involve the issuing of weekly statements.
      Ms. Clare Short: Experience and practice tells us that when employers move to cashless pay they seek to move

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      also to monthly pay. That is the way in which employers move in the real world. That has been the experience in retailing and local government, for example. Employers do this because they can make two sets of savings at the same time.
      Mr. Oakes: Yes, that is practice and experience in the real world. Unfortunately the Government do not understand the real world and what happens in it.
      In many areas—I have no doubt that what I am about to say will be endorsed by my hon. Friends the Members for Stalybridge and Hyde (Mr. Pendry), for Wigan (Mr. Stott), and for Birmingham, Ladywood (Ms. Short), and by many Conservative Members—it is traditional for a man, especially an older working man, to take his pay packet home and give it to his wife. There is nothing sexist about that. The man does so because his wife is the controller of the household. She will know how much she has to pay for children's shoes and she knows the price of meat, for example. She has to plan and to budget, poor woman. The man merely hands over his pay packet. Imagine what the position will be when that pattern of a lifetime changes and the man returns to his wife and says, "I have no pay packet. My money is in the bank."
      The Truck Acts were designed to protect the worker against employers' abuses. They prevented employers and their pals paying in the form of tokens that could be exchanged only in shops owned by them, their brothers or their brothers-in-law. The Government may say that that can no longer happen, but it can. Banks can exploit their customers, and they can do so mercilessly. If a bank account is opened by someone who has never had one previously, I have no doubt that the bank will invite him or her to have a credit card. It will say, "You are entitled to a credit card and perhaps you would like to apply for one." It may even supply one gratuitously.
      I attended a lecture last week at which a distinguished theologian was talking about the modern world. She made a good point about credit cards being a misnomer. They are debt cards, not credit cards. Those who supply the cards want the holders to get into debt; they do not give them anything. Think of the misery that can be created by someone who is not used to the credit card system. He or she might well be used to having cash in the cupboard to pay the rates or the rent. Suddenly this individual is given unlimited finance through a credit card. The Government cannot say that the banks do not do this because we know that they do. My hon. Friend the Member for Ipswich (Mr. Weetch) has a thick dossier on the banks' treatment of students. They advance ludicrous sums to students who are receiving only a pittance in the form of grants. These ludicrous sums cannnot possibly be repaid. I have no doubt that the banks would treat ordinary working people in the same way.
      If the Paymaster General or I live some distance from a bank and we find on arrival that the cash till is closed and it is necessary to go to the next branch, or if we find that there is no dispenser from which we can obtain cash on a Saturday or Sunday, we can drive to a branch where we know that there is a cashpoint. The ordinary working person we are talking about will not have a car. He will not be able to travel as easily as the right hon. and learned Gentleman or myself to a branch where there is a cash dispenser.
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      This is a retrograde step. The Truck Acts were intended to defend the right of working people to be paid what they had earned in the coin of the realm. The Government claim to believe in choice, but they are denying workers the choice to be paid in real money. I envisage endless difficulties resulting from the repeal of the Truck Acts. I envisage much hardship in many homes because many people will not understand that the pattern of a lifetime has been changed.
      Nobody wants change. Neither employers, the banks nor trade unions want it. The Government will listen to nobody. They insist on pushing the change through in the face of universal opposition. The Under-Secretary of State for Employment represents a constituency in the northwest. He should know how things work in working-class households. I hope that the Paymaster General, whose roots are in the working class—his is a significant title in this context—will realise that this is the wrong way in which to treat working people.
      Mr. Trippier: I am grateful to the right hon. Gentleman for giving way and I appreciate that he referred to my right hon. and learned Friend and me in pleasant terms. Does he not know that he is absolutely wrong to say that employers do not want the Bill? Even ICI, which is represented in his constituency at Blackley, cannot wait for it to be enacted—
      Ms. Clare Short: The employers want it.
      Mr. Trippier: It is not a case of money for them. They are sick to the back teeth of robberies of the cash that is brought through the factory gates. Many employers want the Bill.
      Mr. Oakes: I can understand that some employers do not like paying a security firm to bring the wages in. We should take account of that, but we should also take account of the working person's right to be paid in real money. The employee should be able to choose whether to put the money in the bank. Many people dislike banks. If hon. Members do not believe me, they should consider how many families put their savings in a building society. Building societies are open when people are out shopping. When people are off work, the banks are shut. They cannot go in and argue. They can use cashpoints if there are any and they are working, but they might be miles away.
      I ask the Paymaster General to think again and to exercise his office.
      Mr. Holt: Throughout the Committee stage, I have been fairly consistent in my inconsistency with my own side. When I talk to people, I discover that they find the House of Commons a strange place. They consider that it is noisy, that people do not debate properly, that items are introduced for discussion but that hon. Members go off at a tangent. I therefore thought that I would find out what the Opposition had done on this matter. They have learnt from their lesson upstairs. An amendment which we debated in Committee proposed that all wages and salaries should be paid in money. The Opposition have obviously listened and learnt as they have now brought forward a much more reasonable amendment.
      Ms. Clare Short: The point of that amendment was about the Truck Acts and whether people are paid in kind. It was not about cash. I am sure that the hon. Gentleman is aware that there were other amendments.
      Mr. Holt: I am sorry that I have to withdraw the credit that I was giving the Opposition.
      It is easy to pass legislation that is favoured by a small number of large firms and which will have a direct bearing on the daily lives of many people. Payment in cash is intrinsic to English working life, and has been for as long as I can remember. It is not unreasonable to suggest that it should continue unless people consent to change. To lose that right as a result of arbitrary Government action is not very good.
      I understand the Government's argument that we are in the technical age of the computer and that everything can be done differently, but being paid in cash is desperately important to many people. I fear that, if everybody is paid by bank credit transfer, overdrafts will become the norm rather than a rarity and that many people will get themselves into debts which they will never be able to get out of. By abolishing the worker's right to be paid in cash, the Government are abolishing the discipline that the worker imposes on himself because he knows that he cannot spend more than the cash in the pay packet.
      7.45 pm
      When customers come into one of my establishments, they pay in cash. My staff are frequently asked for a little credit, but they know that they will be fired if they give it. Amazingly enough, the cash always turns up. The Government would do well to heed the new clause. It does not preclude a shift from cash payment by consent. That element of consent should be considered closely, as it is not unknown for trade unions to negotiate such a right away, although the worker may not agree with it and might be disadvantaged as a result.
      Mistakes in pay packets have been mentioned. If pay is short, the employee quickly knows and nips down to the wages office to get it rectified. If there is an overpayment which is discovered but not declared, the employee is guilty of theft and can be taken to court. It might not be so easy to assess whether the pay is right from a computer printout, but an employee who inadvertently keeps £22 when he is entitled to only £21 is still guilty of theft. The Bill could lead more people into that trap. The change has not been asked for—indeed, many people say that they do not want it—and it is unnecessary. Only a few people want it.
      The Government have impaled themselves on trying to do something unnecessary by imposition when it could have been done by persuasion. I am sure that most people could eventually be persuaded that it is not unreasonable to be paid in a form other than cash. It is unnecessarily harsh, however, to take the right away by law. That is especially true for the people in the north of England, such as my constituents, who are used to cash and unused to computer printouts. Perhaps the two systems could run in parallel for a while. But to enshrine it in law that an employer—against the wishes of all his employees, or a majority, or even a significant minority, of them—can remove their rights will do the Government's reputation no good.
      Mr. Pendry: The Government are the only people to be out of step on this measure. The Minister visited ICI Gillingham and assumed that ICI Blackley and everyone else took a similar view, but almost everyone is against the measure. My right hon. Friend the Member for Halton (Mr. Oakes) made the point with which I wished to begin. We have been told for years that the Conservative party
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      is the party of choice. The new clause follows that principle. The Opposition are giving the people the opportunity to choose.
      Some of my colleagues may not agree with me, but I believe that people should be paid by cheque. That is common sense. I have done exactly what the hon. Member for Langbaurgh (Mr. Holt) said, although I did not remove the rights of my trade union members. When I was a union official, I negotiated many agreements whereby workers were paid by cheque. It was always done by consent, because it was a democratic decision. We always negotiated agreements whereby the workers got something in return for giving away that right. Some did not wish to do it, and their rights were observed.
      The Conservative party seems to have lost its connection with the rural worker. Two examples taken at random—Ryedale and West Derbyshire—show that the Government are out of touch with the circumstances of the rural worker. He does not have a banking network and, because of the Conservative policy of closing rural post offices, he often must travel miles to the nearest post office.
      We must live in the practical world, about which we hear from only one Conservative Member—the hon. Member for Langbaurgh. Although we do not always agree with him, and he does not always follow his comments by voting in our Lobby, from time to time he talks practical common sense. That is what my hon. Friend the Member for Manchester, Blackley (Mr. Eastham) meant when he talked about citizens advice bureaux being at the sharp end. Those are practical examples of what happens in our society.
      Although I agree that, for safety and many other reasons, people should be paid by cheque, it should be done by negotiation and with consent. That is what the new clause says, and I am surprised that the Conservative party does not wish to be associated with its spirit.
      Mr. Nellist: The Truck Acts, which the new clause would in part retain, give workers the right to be paid in cash. The Paymaster General recently described that method of payment as archaic and anachronistic. He meant that protection is not needed in his perception of modern-day Britain.
      Most of the people who will be affected if the Bill is passed unamended will be lower-paid workers. They have the most to lose from such a transfer. All the costs of shifting from cash pay to bank transfer, and from weekly to monthly payments, will be borne by the workers, and all the benefits will be gained by the employers. It has been estimated that, especially in large companies, when the transfer to a banking system rather than a cash system is run through the Bankers' Automated Clearing Services Ltd—the chairman of the Conservative party has put the benchmark on that—every change would cut costs by £30 a person per year. In Committee, we heard some examples from Sheffield city council and British Telecom, which estimated savings of £31 and £35 per person respectively.
      That will not be a one-off saving to the company, but an accrued saving every year. When the change from cash to bank payment is coupled with the change from weekly to monthly payment, especially in large companies, employers will effectively borrow workers' wages for four

      767
      weeks, and leave it in their bank accounts to attract interest before paying it to the workers who have earned it. If workers are paid in arrears, the problem becomes worse.
      I disagree with some of my comrades about the position of banks. I have just discovered that 7 million workers are paid in cash and that only half of them have bank accounts. The high street banks, considering the prospect of 3·5 million new accounts, must welcome this legislation because of the extra profits that those accounts would generate.
      Ms. Clare Short: The briefing from the banking information service states that banks have not pressed for the repeal of the Truck Acts. They said in previous documents that they did not want customers by compulsion. That is their position on the record.
      Mr. Nellist: I accept that they say that they do not want customers by compulsion, but, faced with the possibility of 3·5 million new customers, they must welcome the legislation.
      The clause would create many disbenefits and difficulties for workers. In Committee, we were told that there would be fewer muggings and robberies and more security, but cash can be stolen only once. A cash card or cheque book, once stolen, can be used many times. I question whether there would be more security for workers. We have heard about the difficulty of access to banks, especially in rural areas, the difficulty of opening a bank account, the fact that those aged under 18 would not normally be given cheque guarantee cards, the difficulties of workers with literacy and language problems and the danger of delays in cheques being transferred into the bank.
      A law centre brought to my attention the case of a worker paid by bank transfer who had an overdraft. The money coming from his firm was poured down the black hole of the overdraft and he had no money on which to live. He was not entitled to supplementary benefit because he was receiving a wage, so he had to rely on charity handouts to buy food for his family.
      The movement from weekly to monthly pay would pose many problems for workers in bridging the gap between surviving on weekly pay and having to wait perhaps two or three weeks before the cycle of monthly pay comes round. On bank charges, the Minister said in Committee that almost every bank operates free banking. That is often true only if an account is in credit—in some cases in credit by £100. For many workers, £100 is two weeks' wages. It may not be much to Tory Members on hundreds of thousands of pounds a year. Hon. Members smile. The hon. Member for Brighton and Hove (Mr. Sainsbury) and his brother and father net £160,000 a week from their ownership of the grocery chain Sainsburys. They can keep their bank accounts in £100 credit and not incur bank charges. It is rather different for those who work for such a grocery chain and who are paid only £50 a week.
      I do not have enough time to read out a letter from a full-time official of the Transport and General Workers Union in Coventry detailing the problems in the factories in Coventry, especially for the workers on piecework. Earlier, I said that if a mistake is made in a weekly wage packet, the worker can run to the wages office and get a payout on the Thursday or Friday afternoon to compensate. If he is paid monthly, he will have to wait for at least a month to have the mistake rectified. In the
      768
      factories in Coventry, and no doubt in the few manufacturing centres that are left after seven years of Tory Government, some workers still carry out piecework or work on bonus schemes. The variations in their wages, which are calculated in the wages office, could cause problems on a monthly basis.
      Time does not permit me to raise points about the National Union of Tailors and Garment Workers and the difficulties which its women workers in rural areas are experiencing. They cannot shop on a Friday night because, by the time they finish work, the banks and building societies are shut. I received a letter from the district secretary of the Tailors and Garment Workers in Belfast informing me that the banks shut between 12.30 pm and 1.30 pm in the city. How are workers supposed to go out during their lunch break and collect money from a bank., if the legislation is passed? But I cannot cover all those details in my short speech tonight.
      8 pm
      Many workers have negotiated the right to transfer to a monthly or bank transfer. Coventry city health authority made a once-and-for-all £30 payment to workers for that. In Leicester, Marconi increased the status of manual workers to staff status. In Southwark, that meant that staff were entitled to London weighting worth £6·20 a week. Leeds council provided more holidays. In those cases trade unions, having discussed the matter and probably having balloted their members, negotiated a transfer of payments.
      If this provision is unamended by new clause 10, it will remove that choice from working people, and at the end of the day many workers will be out of pocket. I hope that all my comrades will support the new clause and that the hon. Member for Langbaurgh (Mr. Holt), who spent three months in Committee parading his conscience before us, as he has done tonight, and then sat on his hands and registered a No vote, will also support the new clause tonight and put his money where his mouth is.
      Mr. Caborn: I wish to raise two important points which have been omitted from the debate.
      I have received serious representations from ethnic minorities, including the Sheffield Asian Welfare Association. They say that they will face new difficulties if cashless pay is agreed to. Because of the Government's attitude toward immigrants, they are afraid, and have great difficulty registering with an authority. If the Government are not prepared to accept the new clause, and if cashless pay is agreed to, it will have a major effect on our ethnic minorities. Therefore, I ask the Government seriously to consider accepting new clause 10. It is reasonable.
      People who have been dealing with the trade union side of industry have agreed that we would all like to move toward cashless pay, but without being forced to do so I hope that the Government will take that advice from industry. The Minister has been able to mention only one company which is in favour of this proposal—ICI. Even the CBI is against it. I suggest that the Minister should bear that in mind when he replies.
      Mr. Holt: The hon. Gentleman has raised one matter which has not so far been mentioned, and I hope that the Paymaster-General will deal with it when he replies. In talking about ethnic minorities and the abolition of the Truck Acts, we are talking about payment in the coin of the realm. There is a possibility that ethnic employers will pay in ethnic money which can then be exchanged only at

      769
      ethnic shops and through ethnic banks. It will not be against the law for employers to pay in that way. The Government are opening that door by abolishing the Truck Acts without concerning themselves with the coin of the realm.
      Mr. Caborn: I had not taken that point on board, and the Minister should consider it when he replies.
      The Paymaster General and Minister for Employment (Mr. Kenneth Clarke): I have never before had the pleasure of listening to the hon. Member for Manchester, Blackley (Mr. Eastham) speak from the Opposition Front Bench. It may be that this is his first time, and I congratulate him on that. I should like to have begun by replying to him on a new clause or amendment which I could accept on behalf of the Government, but I am afraid that in urging this new clause he is on a somewhat ill-conceived mission.
      Several hon. Members have mentioned that this part of the Bill repeals a provision which was first introduced by the Truck Act 1831. In a speech during the last debate, the hon. Member for Birmingham, Ladywood (Ms. Short) was a little critical of my, apparently, scornful views of the legislation, and the hon. Member for Stalybridge and Hyde (Mr. Pendry) reminded me that I had described the legislation on Second Reading as archaic. Like any good Conservative, I treat old legislation with suitable veneration, and the fact that the first Truck Act was passed in 1831 is, in itself, not a reason for repealing it.
      The description of the Truck Acts given today, confirms my impression that the trade union and labour movement is extremely old-fashioned and backward-looking. Its veneration for a slowly vanishing society can sometimes be taken to extremes. I shall illustrate that first by reminding the House of the basis of the Truck Act 1831, which remains the basis of the present law until this Bill repeals it.
      As many hon. Members will know from their modern history lessons in school, the origins of the Truck Act go back to the pernicious system that sprang up in the early 19th century when some labourers began to be paid in truck instead of in cash. It usually took the form of tokens, which could be cashed only at a company shop, and, obviously, the company could dictate the price of the goods exchanged for the tokens. That is the basis of the legislation, and it has dictated the form of legislation which has come down to us 150 years later. The provision about which hon. Members have been speaking provides that manual workers have the right to insist on payment in cash.
      All hon. Members will appreciate that a great deal has happened since 1831.
      Ms. Short: So that no one is misled, may I tell the House that the most recent relevant legislation is the Payment of Wages Act 1960?
      Mr. Clarke: That was when the measure was last consolidated. The right of manual workers to be paid in cash has come indirectly through various subsequent provisions from the Truck Act 1831.
      A great deal has changed since then. First, the business of paying in truck has ceased to be a social problem. Secondly, we no longer make the distinction between
      770
      manual and non-manual workers for most pay purposes. In both cases we expect the important aspects of pay and remuneration to be decided by agreement and discussion and, where necessary, by contract. There is no distinction between the way in which manual and non-manual workers arrive at agreements over important matters, such as rates of pay, bonuses, overtime rates and holiday entitlement. The law is the same for both manual and non-manual workers, except that manual workers have the right to insist on being paid in cash. That has meant that some employers and trade unions have found that where there is a desire to consider non-cash payment for manual workers, a handful of people, who insist on their legal rights to be paid in cash, can hold up and prevent the whole transition.
      For non-manual work we have seen all sorts of non-cash payments which are fringe benefits and much coveted by others, such as company cars. It would be illegal to give them to manual workers because it would be in breach of the Truck Acts, which are being so passionately defended. On the other hand, a manual worker can insist on payment in cash.
      Mr. Nellist: Will the Minister give way?
      Mr. Clarke: Both the hon. Members for Coventry, South-East (Mr. Nellist) and for Blackley appear to imagine that they are talking about the low paid. The law which they are defending has nothing to do with the low paid. Many low-paid workers are not protected by the Truck Acts and are exposed to this misery and hold this great grievance.
      Mr. Nellist: Will the Minister give way?
      Mr. Clarke: I will in a second.
      This provision, which is being defended so eloquently, is of benefit only to manual workers—the labourers of 19th century England who had its protection. Shop assistants are not protected by it.
      Ms. Short: They are.
      Mr. Clarke: Shop workers are not. Ms. Short: Yes, they are.
      Mr. Clarke: I am open to correction, and if the hon. Lady has found an authority, obviously I shall look at it. I understand that the whole provision depends on the definition of manual and non-manual workers. Clerical workers or shop assistants are not protected—[Interruption.]. There are plenty of low-paid non-manual workers who are not protected by the Truck Acts. No non-manual worker has ever lobbied me to extend the benefits of the Truck Acts in order to protect him from the fearful exploitation to which Opposition Members believe that he will be exposed.
      Ms. Clare Short: I refer the right hon. and learned Gentleman to the Library briefing. That says that in 1896 shop assistants were brought within the protection offered by the Acts.
      Mr. Clarke: Perhaps I could see the Library briefing, as I am not sure that the hon. Lady is very certain of her facts. But if she is right, I shall accept that correction. I have not looked up the authorities, but I should be surprised if shop assistants were included in the definition of manual workers to be paid in truck.
      Ms. Clare Short: I shall give the Minister the briefing.
      Mr. Nellist: Will the Minister give way now, while he is reading the briefing?
      Mr. Clarke: I see that shop workers are included for the purposes of deductions for fines, damaged goods, materials or services. The right to be paid in cash does not extend to shop workers. It extends to manual workers. A well-paid manual worker digging a ditch and earning £150 to £200 a week—and plenty of manual workers are paid that much—is covered by the Truck Acts. However, a shop assistant or clerical worker—I am on very sound ground when it comes to clerical workers—who is paid £40 or £50 a week is not protected by the legislation.
      Mr. Nellist rose
      Mr. Clarke: A low-paid clerical worker has never come to me demanding the protection of the Truck Acts.
      Mr. Oakes: Will the Minister address himself to the new clause, which says:
      "No worker who is currently paid in cash shall cease to be so paid without his or her consent."
      We are not asking for the repeal of clause 11. The new clause refers to "any worker".
      Mr. Clarke: I shall come to that point. The Government take the view that this provision, which is designed to stop labourers being paid in tokens, is perhaps not the most pressing cause at present. However, it is undesirable that a handful of people should be able to stop a change towards a more cash-free society. We propose repeal. But the Opposition think that in 1831 the provisions did not go far enough. They think that in today's social conditions any workers who are now paid in cash should be protected in law. They are moving in a direction that is a little out of touch when it comes to legal reform.
      Mr. Nellist rose—
      Mr. Clarke: I shall give way to an hon. Gentleman who, I am quite convinced, is out of tune with the times on a wide number of social and political matters.
      Mr. Nellist: Saying that the 1831 Act has no validity ought to stick in the craw of a Government who are supposed to be taking us back to Victorian values. The Minister accused us of talking about the Act as if it applied only to low-paid workers. Of course it applies to manual workers on £150 or £200 a week. But if they were given the choice, those workers might well go over to cashless pay, because they would not have to worry about keeping £100 in their bank accounts to avoid bank charges. They might even have cars, so they would not have to rely on the poor bus services in rural areas to reach a bank, building society or post office when it is open. The low-paid will be hurt most if they lose the right to be paid in cash, because they will, by definition, have the most problems if this Bill is enacted.
      8.15 pm
      Mr. Clarke: In defending part of the Truck Acts, the hon. Gentleman is not defending Victorian values, because we are talking about pre-Victorian legislation. The provisions that he so passionately defends were almost out of date before the great Queen died. It has taken us a long time to get round to repealing them. It has been frequently said that employers and employees do not want
      772
      this change. But if nobody wants it, there will not be any change. Nothing in the Bill obliges an employer or employee to stop cash payments if that is what he prefers.
      Opposition Members may have noticed that an increasing number of people have bank accounts. The banks are beginning to reverse their appallingly anti-consumer behaviour of a few years ago and are opening once more on Saturdays. There are also automatic paying-out services. More and more people have building society accounts. People are also paid in Giro, and we are moving towards a more cashless society.
      We propose to repeal the legislation because the bulk of employees might be quite content to go over to non-cash payments—and good luck to them if they can negotiate some share of the savings—but it would need only a handful of people in the company to say that they are protected by the Truck Acts and that they will not agree to being paid in a different way, for that change to prove impossible. We have heard some amazing hyperbole and tales of agony and grief. If we repeal this provision, we shall move towards being a cashless society in line with other modern societies that we should consider to be our rough equivalent.
      The proportion of payments made by cash in this country compared with the proportion made by cash in other countries is relevant. In Britain, 39 per cent. of wage payments are made in cash. In America 1 per cent. of wage payments are made in cash. In the Federal Republic of Germany 5 per cent. are paid in cash. The Truck Acts have stopped that drift towards a cashless society.
      There are two advantages to making it much easier for the bulk of the population and their employers to move into the late 20th century and further towards a cashless society. First, it is much more efficient and less costly. Substantial savings can be made per employee. That is why various bodies such as local authorities as well as many private sector employers are anxious to move to cash-free payments. If substantial sums can be saved—
      Mr. John Evans: What about collective bargaining?
      Mr. Clarke: Collective bargaining cannot waive legal rights. If neither the employer nor the employee is interested in non-cash payments, I assume that they will not be made. But if a trade union wanted to negotiate changing to non-cash payments and had the support of the employees—perhaps there is some deal that will share out the savings—it would need only a couple of employees to say, "Blow that. We shall insist on our legal rights under the Truck Acts," for that process to be brought to a halt, unless our Bill is enacted and the Truck Acts are repealed. Unions cannot negotiate away the legal rights of their members.
      The hon. Member for St. Helens, North (Mr. Evans) is defending archaic law. In this country there is a high proportion of wage payments in cash, which means that costs are imposed on industry. In many industries, both the employer and the employee are deprived of the chance to participate in the savings that can be made from going over to a cashless system of payment.
      A cashless system of payment would also reduce the opportunities for crime. I spoke about that on Second Reading, so I shall not dilate about it again. In this country, wage snatches are a profitable form of criminal activity. Very large sums of cash are moved about in order

      773
      to pay people under our old-fashioned system, and that means a high security risk. In 1984, there were almost 450 armed robberies at factories and offices or on the public highway. Many of them were wages snatches. It is a totally unnecessary credit risk to have security lorries stuffed full of banknotes going in and out of factories every week because we are such a traditional society that we have not got round to repealing the legislation.
      Savings can be made, and there are obvious implications for crime prevention. The Bill would enable us to make social changes, in line with more modern societies, which most people would regard as perfectly predictable in today's age. I am told that people do not have bank accounts, that they cannot open them, or that they are costly. But the position is steadily changing. I am told that 75 per cent. of adults have bank accounts. Almost 90 per cent. have accounts at some deposit-taking institution.
      There are more credit cards, and more people are accustomed to taking advantage of automated banking facilities.
      Ms. Clare Short: What about stolen credit cards?
      Mr. Clarke: When the hon. Lady replies, she will obviously launch into an attack on the whole concept of the banking society. She feels that credit cards and cheque books worry hon. Members. I can only assume that the hon. Members who have spoken in the debate and the hon. Lady, who is about to do so, keep their savings in an old sock at the bottom of their bed and pay their bills in pound coins. The fact is that three quarters of the adult population have a bank account. We are plainly moving towards a society in which less cash will be used and more convenient non-cash transactions will take place. There are small, vulnerable groups which for years have been accustomed to taking payments in forms other than cash.
      I conclude on what I regard as a telling point. The Opposition's claims about the low-paid employed presumably do not apply to the unemployed. For years, the unemployed have not been paid the unemployment benefit by cash. They have been paid by Giro. All social security benefits are paid by Giro. I am astonished that the Opposition have not thrown in that all-embracing clause, that march back to the great days of William IV of 1831, and the equivalent legal protection for the unemployed and those who receive social security benefits. The Opposition have not thought through their proposal.
      An extraordinary and impassioned debate has been aroused around a quite insignificant repeal provision. The Opposition's new clause would have the preposterous effect of extending a legal protection, which became outmoded a century or more ago, to many people to whom it does not apply at the moment.
      Ms. Clare Short: The Paymaster General and Minister for Employment insulted low-paid workers by pretending that the Bill which will damage them so severely is about giving them cards. That was not funny. We are talking about workers who run out of money at the end of every week. Each week, they must decide whether to spend their money on food for their children or on clothes that they might need. Too many people live like that. The Minister insulted the unemployed when he talked as though they do not have plenty of time to go to a post office or a bank to
      774
      get their money. That is just whey they do have—too little to do, and too little money. To say that we are holding back the low paid from the conditions enjoyed by the unemployed is a joke and insensitive.
      Neither the Labour party nor the British people are opposed to cashless pay. In fact, in the recent past, there has been a massive shift towards cashless pay by negotiation, agreement and freedom of choice. In 1969, 75 per cent. of all employees were paid in cash. Now, the figure is below 40 per cent.
      We are in favour of massive progress by agreement, consent and free choice. Our new clause and amendment say that those who are currently paid in cash shall continue to be paid in cash unless they give their consent to a change. We advocate freedom of choice to people, and not legislation that forces them into something that they do not want.
      The repeal of the Truck Acts is not required to introduce cashless pay. The Central Policy Review Staff, the old think tank, said in its study that it was not a major barrier. The movement has been going on, in any event. The repeal of the Truck Acts means that people can be forced into such a position in an inconvenient way, without sharing the benefits of the savings to employers. Until now, employers who have moved in that respect have had to negotiate. They have known of the benefits to themselves from such a change. They have told workers, "We shall give you part of the benefit. We are moving to monthly pay. We shall help you in the process of change." None of that will be necessary now. It can, and indeed will, be forced on workers whether they like it or not.
      My hon. Friend the Member for Blackburn (Mr. Straw) has already received a complaint from shop workers who have been told that, with the legislation, they will be moved on to cashless and monthly pay. Those shop workers are women on low pay. They are worried because, after finishing work, they spend their money on shopping for their families.
      Mr. Kenneth Clarke: I intervene because the hon. Lady is being carried away, again, into error. The legislation and the Opposition's new clause have nothing to do with changes to monthly pay. As to a change being made without agreement, if it is a term of the contract of employment, nothing in the legislation enables an employer to overturn, unilaterally, the contract of employment. The example cited by the hon. Lady was miles wide of the mark with respect to the effect of the Bill or the new clause.
      Ms. Short: The Minister is wrong. In practice, in the real world, the shifts to cashless and monthly pay go together.
      Mr. Martin rose—
      Mr. Jack Straw rose—
      Mr. Kenneth Clarke rose—
      Ms. Short: I shall give way to my hon. Friend.
      Mr. Straw rose—
      Mr. Clarke: Will the hon. Lady give way?
      Ms. Short: No, I gave way to the right hon. and learned Gentleman just now.
      Mr. Straw: The Minister said that my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) was in

      775
      error. I corroborate everything she said about what is happening in Blackburn. The information came from me. I am certain about it. Whatever the Minister says about a particular national firm—I shall not name it because the employees fear for their jobs—[Interruption.] Oh, yes. The Minister knows about unemployment in Blackburn. The company is moving towards cashless pay only because of the legislation and the fear that it can generate in the minds of workers.
      Ms. Short: My hon. Friend reinforces the point—
      Mr. Kenneth Clarke rose—
      Ms. Short: I shall not give way. We are under pressure. The Minister spoke for some time.
      It is inconvenient for some workers to be paid in a non-cash form. Women who earn a small amount, who perhaps work part-time, like to get their money and go out shopping. They find it inconvenient to receive cashless pay because they must go to a bank to withdraw the money.
      Mr. Kenneth Clarke rose—
      Ms. Short: I shall give way before I am finished, but not yet. I understand that the Truck Acts extend to shop workers. I understand that the Under-Secretary of State has looked up the legislation. The Minister and I shall have to look it up in detail. There is a general understanding that shop workers are covered by the protection of the legislation.
      Mr. Kenneth Clarke: The hon. Lady is wrong.
      Ms. Short: I am not wrong. I do not know why the Paymaster General seeks to heckle. I think that it is because his case is so bad. [Interruption.]
      Mr. Deputy Speaker (Mr. Harold Walker): Order. The Minister should set an example to hon. Members. He is not the only one who heckles from a sedentary position, but he is the last person who should do so.
      Ms. Short: The Opposition do not care about what is happening in the United States of America in the way that Government Members passionately do. We care about what is in the interests of workers in Britain. We want those workers to have freedom of choice. We want those workers who are currently paid in cash to continue to be paid in cash or to negotiate agreements that suit themselves.
      Mr. Martin rose—
      Ms. Short: I must finish or my Whip will strangle me.
      The Opposition are in favour of freedom of choice. The Government are taking from low-paid workers the right to be paid in cash if that suits their convenience.
      Mr. Kenneth Clarke: The hon. Lady said that she would give way to me before she resumed her seat. I am not talking about the facts of the Blackburn case. I point out to her that the law to which she referred applies to manual workers' rights to be paid in cash. She is not talking about the real world. She is talking about the 1831 law. The debate has nothing to do with weekly or monthly payments and part-time women workers, because hardly any of them are manual workers. It has nothing to do with the low-paid, because it protects some low-paid workers and not others. Does the hon. Lady concede that she has actually got the legislation to which she referred fairly thoroughly around her neck?
      Ms. Short: The Minister protests too much and knows too little. There are many female part-time manual workers in my constituency. They live in poverty. They need their money in cash. That is their preference. The Opposition believe in their freedom of choice. The Paymaster General does not.
      Question put, That the clause be read a second time:-
      The House divided: Ayes 165, Noes 248.

      Division No. 179]

      [8.29 pm

      AYES

      Adams, Allen (Paisley N)

      Golding, John

      Anderson, Donald

      Gould, Bryan

      Archer, Rt Hon Peter

      Gourlay, Harry

      Ashley, Rt Hon Jack

      Hamilton, James (M'well N)

      Ashton, Joe

      Hamilton, W. W. (Fife Central)

      Atkinson, N. (Tottenham)

      Hardy, Peter

      Bagier, Gordon A. T.

      Harrison, Rt Hon Walter

      Banks, Tony (Newham NW)

      Hart, Rt Hon Dame Judith

      Barnett, Guy

      Healey, Rt Hon Denis

      Barron, Kevin

      Heffer, Eric S.

      Beckett, Mrs Margaret

      Hogg, N. (C'nauld & Kilsyth)

      Bell, Stuart

      Holland, Stuart (Vauxhall)

      Benn, Rt Hon Tony

      Home Robertson, John

      Bermingham, Gerald

      Hoyle, Douglas

      Bidwell, Sydney

      Hughes, Robert (Aberdeen N)

      Blair, Anthony

      Hughes, Roy (Newport East)

      Boyes, Roland

      Hughes, Sean (Knowsley S)

      Bray, Dr Jeremy

      Janner, Hon Greville

      Brown, Gordon (D'f'mline E)

      John, Brynmor

      Brown, Hugh D. (Provan)

      Jones, Barry (Alyn & Deeside)

      Brown, N. (N'c'tle-u-Tyne E)

      Kaufman, Rt Hon Gerald

      Brown, R. (N'c'tle-u-Tyne N)

      Kilroy-Silk, Robert

      Brown, Ron (E'burgh, Leith)

      Lambie, David

      Buchan, Norman

      Lamond, James

      Caborn, Richard

      Leadbitter, Ted

      Callaghan, Jim (Heyw'd & M)

      Leighton, Ronald

      Campbell-Savours, Dale

      Lewis, Terence (Worsley)

      Canavan, Dennis

      Litherland, Robert

      Carter-Jones, Lewis

      Lloyd, Tony (Stretford)

      Clarke, Thomas

      Lofthouse, Geoffrey

      Clay, Robert

      McDonald, Dr Oonagh

      Clelland, David Gordon

      McKay, Allen (Penistone)

      Clwyd, Mrs Ann

      McKelvey, William

      Cocks, Rt Hon M. (Bristol S)

      MacKenzie, Rt Hon Gregor

      Cohen, Harry

      McNamara, Kevin

      Conlan, Bernard

      McTaggart, Robert

      Cook, Frank (Stockton North)

      Madden, Max

      Corbyn, Jeremy

      Marek, Dr John

      Craigen, J. M.

      Marshall, David (Shettleston)

      Cunliffe, Lawrence

      Martin, Michael

      Dalyell, Tam

      Mason, Rt Hon Roy

      Davies, Rt Hon Denzil (L'lli)

      Maxton, John

      Davis, Terry (B'ham, H'ge H'l)

      Maynard, Miss Joan

      Deakins, Eric

      Meacher, Michael

      Dewar, Donald

      Michie, William

      Dobson, Frank

      Millan, Rt Hon Bruce

      Dormand, Jack

      Miller, Dr M. S. (E Kilbride)

      Douglas, Dick

      Morris, Rt Hon A. (W'shawe)

      Dubs, Alfred

      Nellist, David

      Duffy, A. E. P.

      Oakes, Rt Hon Gordon

      Dunwoody, Hon Mrs G.

      O'Brien, William

      Eadie, Alex

      O'Neill, Martin

      Eastham, Ken

      Orme, Rt Hon Stanley

      Edwards, Bob (W'h'mpt'n SE)

      Park, George

      Evans, John (St. Helens N)

      Parry, Robert

      Ewing, Harry

      Patchett, Terry

      Faulds, Andrew

      Pavitt, Laurie

      Field, Frank (Birkenhead)

      Pendry, Tom

      Fisher, Mark

      Pike, Peter

      Flannery, Martin

      Powell, Raymond (Ogmore)

      Foot, Rt Hon Michael

      Prescott, John

      Forrester, John

      Randall, Stuart

      Foster, Derek

      Raynsford, Nick

      Fraser, J. (Norwood)

      Redmond, Martin

      George, Bruce

      Rees, Rt Hon M. (Leeds S)

      Gilbert, Rt Hon Dr John

      Richardson, Ms Jo

      Godman, Dr Norman

      Roberts, Ernest (Hackney N)

      777

      Robertson, George

      Thomas, Dr R. (Carmarthen)

      Robinson, G. (Coventry NW)

      Thorne, Stan (Preston)

      Rogers, Allan

      Tinn, James

      Ross, Ernest (Dundee W)

      Torney, Tom

      Rowlands, Ted

      Wareing, Robert

      Sedgemore, Brian

      Weetch, Ken

      Sheerman, Barry

      Welsh, Michael

      Sheldon, Rt Hon R.

      White, James

      Shore, Rt Hon Peter

      Wigley, Dafydd

      Short, Ms Clare (Ladywood)

      Williams, Rt Hon A.

      Silkin, Rt Hon J.

      Wilson, Gordon

      Skinner, Dennis

      Winnick, David

      Smith, C.(Isl'ton S & F'bury)

      Young, David (Bolton SE)

      Snape, Peter

      Spearing, Nigel

      Tellers for the Ayes:

      Stewart, Rt Hon D. (W Isles)

      Mr. Don Dixon and Mr. Frank Haynes.

      Strang, Gavin

      Straw, Jack

      NOES

      Aitken, Jonathan

      Cranborne, Viscount

      Alexander, Richard

      Critchley, Julian

      Alton, David

      Crouch, David

      Amess, David

      Currie, Mrs Edwina

      Arnold, Tom

      Dickens, Geoffrey

      Ashby, David

      Dicks, Terry

      Ashdown, Paddy

      Dorrell, Stephen

      Aspinwall, Jack

      Dover, Den

      Atkins, Robert (South Ribble)

      du Cann, Rt Hon Sir Edward

      Atkinson, David (B'm'th E)

      Durant, Tony

      Baker, Rt Hon K. (Mole Vall'y)

      Dykes, Hugh

      Baker, Nicholas (Dorset N)

      Edwards, Rt Hon N. (P'broke)

      Baldry, Tony

      Evennett, David

      Banks, Robert (Harrogate)

      Eyre, Sir Reginald

      Batiste, Spencer

      Fallon, Michael

      Beaumont-Dark, Anthony

      Farr, Sir John

      Bellingham, Henry

      Finsberg, Sir Geoffrey

      Bendall, Vivian

      Fookes, Miss Janet

      Benyon, William

      Forman, Nigel

      Bevan, David Gilroy

      Forth, Eric

      Biggs-Davison, Sir John

      Fox, Marcus

      Blackburn, John

      Freud, Clement

      Blaker, Rt Hon Sir Peter

      Fry, Peter

      Body, Sir Richard

      Gale, Roger

      Bonsor, Sir Nicholas

      Galley, Roy

      Bottomley, Peter

      Gardiner, George (Reigate)

      Bottomley, Mrs Virginia

      Gardner, Sir Edward (Fylde)

      Bowden, A. (Brighton K'to'n)

      Garel-Jones, Tristan

      Bowden, Gerald (Dulwich)

      Glyn, Dr Alan

      Braine, Rt Hon Sir Bernard

      Gow, Ian

      Bright, Graham

      Gower, Sir Raymond

      Brinton, Tim

      Grant, Sir Anthony

      Brooke, Hon Peter

      Gregory, Conal

      Brown, M. (Brigg & Cl'thpes)

      Griffiths, Sir Eldon

      Browne, John

      Griffiths, Peter (Portsm'th N)

      Bruinvels, Peter

      Grist, Ian

      Bryan, Sir Paul

      Ground, Patrick

      Buck, Sir Antony

      Grylls, Michael

      Budgen, Nick

      Gummer, Rt Hon John S

      Bulmer, Esmond

      Hamilton, Hon A. (Epsom)

      Burt, Alistair

      Hampson, Dr Keith

      Butler, Rt Hon Sir Adam

      Hancock, Michael

      Carlile, Alexander (Montg'y)

      Hannam, John

      Carlisle, John (Luton N)

      Harris, David

      Carttiss, Michael

      Harvey, Robert

      Cash, William

      Haselhurst, Alan

      Chalker, Mrs Lynda

      Havers, Rt Hon Sir Michael

      Chapman, Sydney

      Hawkins, C. (High Peak)

      Chope, Christopher

      Hawkins, Sir Paul (N'folk SW)

      Churchill, W. S.

      Hawksley, Warren

      Clark, Dr Michael (Rochford)

      Hayes, J.

      Clark, Sir W. (Croydon S)

      Hayhoe, Rt Hon Barney

      Clarke, Rt Hon K. (Rushcliffe)

      Hayward, Robert

      Clegg, Sir Walter

      Heathcoat-Amory, David

      Cockeram, Eric

      Heddle, John

      Colvin, Michael

      Hickmet, Richard

      Conway, Derek

      Hicks, Robert

      Coombs, Simon

      Higgins, Rt Hon Terence L.

      Cope, John

      Hind, Kenneth

      Couchman, James

      Holland, Sir Philip (Gedling)

      778

      Hordern, Sir Peter

      Rumbold, Mrs Angela

      Howarth, Alan (Stratf'd-on-A)

      Sackville, Hon Thomas

      Howarth, Gerald (Cannock)

      Sayeed, Jonathan

      Howell, Ralph (Norfolk, N)

      Scott, Nicholas

      Howells, Geraint

      Shaw, Giles (Pudsey)

      Hubbard-Miles, Peter

      Shaw, Sir Michael (Scarb')

      Hughes, Simon (Southwark)

      Shelton, William (Streatham)

      Hunt, David (Wirral W)

      Shepherd, Colin (Hereford)

      Hunter, Andrew

      Shepherd, Richard (Aldridge)

      Hurd, Rt Hon Douglas-

      Shields, Mrs Elizabeth

      Irving, Charles

      Skeet, Sir Trevor

      Jackson, Robert

      Smith, Tim (Beaconsfield)

      Jenkin, Rt Hon Patrick

      Soames, Hon Nicholas

      Johnson Smith, Sir Geoffrey

      Speed, Keith

      Jones, Robert (Herts W)

      Speller, Tony

      Jopling, Rt Hon Michael

      Spencer, Derek

      Kennedy, Charles

      Spicer, Jim (Dorset W)

      Kershaw, Sir Anthony

      Squire, Robin

      Key, Robert

      Stanbrook, Ivor

      King, Roger (B'ham N'field)

      Stanley, Rt Hon John

      Kirkwood, Archy

      Steel, Rt Hon David

      Knight, Greg (Derby N)

      Steen, Anthony

      Knight, Dame Jill (Edgbaston)

      Stern, Michael

      Knowles, Michael

      Stevens, Lewis (Nuneaton)

      Knox, David

      Stewart, Andrew (Sherwood)

      Lang, Ian

      Stewart, Ian (Hertfdshire N)

      Latham, Michael

      Stokes, John

      Lawler, Geoffrey

      Stradling Thomas, Sir John

      Lawrence, Ivan

      Sumberg, David

      Leigh, Edward (Gainsbor'gh)

      Taylor, John (Solihull)

      Lennox-Boyd, Hon Mark

      Taylor, Teddy (S'end E)

      Lilley, Peter

      Temple-Morris, Peter

      Livsey, Richard

      Thomas, Rt Hon Peter

      Lloyd, Ian (Havant)

      Thompson, Donald (Calder V)

      Maclean, David John

      Thompson, Patrick (N'ich N)

      McLoughlin, Patrick

      Thorne, Neil (Ilford S)

      Major, John

      Thornton, Malcolm

      Maples, John

      Thurnham, Peter

      Marlow, Antony

      Townend, John (Bridlington)

      Maude, Hon Francis

      Trippier, David

      Meadowcroft, Michael

      Trotter, Neville

      Mellor, David

      Twinn, Dr Ian

      Merchant, Piers

      van Straubenzee, Sir W.

      Miller, Hal (B'grove)

      Vaughan, Sir Gerard

      Miscampbell, Norman

      Viggers, Peter

      Moate, Roger

      Waddington, David

      Neale, Gerrard

      Waldegrave, Hon William

      Newton, Tony

      Walden, George

      Onslow, Cranley

      Wallace, James

      Osborn, Sir John

      Waller, Gary

      Ottaway, Richard

      Ward, John

      Penhaligon, David

      Wardle, C. (Bexhill)

      Porter, Barry

      Watson, John

      Portillo, Michael

      Watts, John

      Powell, William (Corby)

      Wells, Bowen (Hertford)

      Powley, John

      Wells, Sir John (Maidstone)

      Rathbone, Tim

      Whitfield, John

      Rees, Rt Hon Peter (Dover)

      Wiggin, Jerry

      Rhodes James, Robert

      Wolfson, Mark

      Rhys Williams, Sir Brandon

      Wood, Timothy

      Ridley, Rt Hon Nicholas

      Yeo, Tim

      Robinson, Mark (N'port W)

      Younger, Rt Hon George

      Roe, Mrs Marion

      Rossi, Sir Hugh

      Tellers for the Noes:

      Rost, Peter

      Mr. Tim Sainsbury and Mr. Michael Neubert.

      Rowe, Andrew

      Question accordingly negatived

    Clause 1

      GENERAL RESTRICTIONS ON DEDUCTIONS MADE, OR PAYMENTS RECEIVED, BY EMPLOYERS
      Mr. Trippier: I beg to move amendment No. 1, in page 1, line 9, leave out 'of his' and insert 'employed by him'.
      Mr. Deputy Speaker: With this it will be convenient also to consider Government amendments Nos. 6, 48, 49, and 51.
      Mr. Trippier: These amendments change the phrase "worker of his" to "worker employed by him" wherever it occurs in the Bill, and make changes consequent on such rewording. They reflect concern which was expressed by the opposition in Committee about the infelicitous, although unintended, inference which could be drawn from the original wording.
      The point—eloquently put at the second sitting of the Committee by the hon. Member for Bow and Poplar (Mr. Mikardo)—is that "worker of his" could be taken to imply ownership, reducing the worker to the same status, I recall him saying, as a machine tool or workbench, something that is the property of the employer. "Worker employed by him" avoids any such implications of ownership.
      Ms. Clare Short: My hon. Friend the Member for Bow and Poplar (Mr. Mikardo), who moved the original amendment in Committee, cannot be here now. I am sure that he would be pleased at his symbolic victory. It is a pity we could not win more real changes in the Bill. None the less, for the Government to bring forward in 1986 a Bill which talks about workers belonging to their employers shows something about their attitude. My hon. Friend's efforts have amended the Bill in a desirable direction.
      Amendment agreed to
      Mr. Trippier: I beg to move amendment No. 2, in page 1, line 12, leave out 'term' and insert 'provision'.
      Mr. Deputy Speaker: With this it will be convenient also to consider the following: Government amendments Nos. 7 and 8.
      Amendment No. 9, in page 2, line 7, leave out 'shown' and insert 'given'.
      Government amendments Nos. 10, 11, 12 and 17.
      Mr. Trippier: This is my attempt to be fair and reasonable, despite the hon. Member for Birmingham, Ladywood (Ms. Short) has just said. These amendments have been tabled in response to an undertaking that I gave, which I think is referred to in column 65 of the report of second sitting of the Committee.
      On that occasion I undertook to consider a proposal put forward by the hon. Member for Bow and Poplar that the written term which sets out the circumstances in which a deduction from wages may be made should be given rather than shown to the worker.
      I think that Opposition Members will agree that these amendments achieve this intention. Their effect is that, where the employer relies on a written term of the contract to authorise a deduction he must, in advance of the deduction, give the worker a copy of the term authorising the deduction or give him an explanation of the term. Indeed, the amendments go further by providing that, where the employer has to rely on two or more terms, a copy of each of these terms must be given to the worker or the combined effect of such terms must be explained to the worker.
      These amendments improve the Bill and give added protection to the worker against unlawful deductions from wages. I commend the amendments to the House.
      8.45 pm
      Mr. Nellist: I remember taking part in that debate in Committee. I ask the Minister the same question now as I asked then. He has made a halfway house attempt with this set of amendments. Why, given the Government's view that a contract of employment is a quasi-legal document which is solemn and binding, is he not prepared to introduce Government amendments which say that the question of deductions and so on should be in a document signed by the worker and the employer to show that both agree to its provisions?
      Mr. Trippier: When we are talking about a contract of employment, as we discussed in Committee at some length, it does not have to be a written contract. With this legislation we have insisted that at least there should be a written term of a contract which makes it clear that there is a power to deduct. A written term has to be handed to the worker and there must be proof that that has taken place. I think that the hon. Gentleman should be satisfied. Amendment No. 9, tabled in the name of the Opposition, will have a similar effect to the amendment I am moving. I hope that, under the circumstances, the Opposition will feel it necessary to withdraw that amendment.
      Ms. Clare Short: This again is a small but welcome amendment. Under the Bill as drafted it would have been possible for an employer to make a deduction simply having waved a piece of paper under the nose of a worker and only showing the written terms of the contract to the worker and not having to give a copy to the worker. That is rectified by the amendment. The amendment is a concession—only a small one but it is something—that the Government have been forced by the Opposition to make. We are grateful for that and, of course, we shall withdraw amendment No. 9.
      Mr. Deputy Speaker: That does not arise on the question before the House. We shall deal with that, if necessary, when we come to it.
      Amendment agreed to.
      Mr. Caborn: I beg to move amendment No. 5, in page 1, line 15, at end insert—
      '(c) the employer makes the deduction within 12 months of the discovery of the act or omission complained of'.
      Mr. Deputy Speaker: With this it will be convenient also to consider Government amendments Nos. 26, 27, 29, 31, 32, 33, 38, 39, 41 and 42.
      Mr. Caborn: In Committee we argued forcefully about the position of an employer being effectively handed an open cheque in being able to make deductions from a worker going back any length of time that the employer could find to be justified. We thought that that was wrong and, to a large extent, against the natural trend of British justice. Timetables are laid down, and we thought that that was extremely important for the Bill. We did not believe that it was right that an employer could tell an employee that he had committed an act of theft or whatever five years previously and that that was now to be brought against him.
      It is evident that the force of argument put by my hon. Friends in Committee has sunk in with the Government because in amendment No. 26, the Government, to a large extent, accept our points. However, their amendment is to a different part of the Bill—clause 2. That is welcome. My hon. Friends' arguments were put forcefully and in a

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      common-sense way. They were born out of their knowledge of industry. The Paymaster General's performance showed that he does not even know who is covered by the Truck Acts. That shows a certain amount of misunderstanding at best and total illiteracy at worst.
      Therefore—
      Mr. Kenneth Clarke rose—
      Mr. Caborn: The right hon. and learned Gentleman will have plenty of time to have a go.
      Therefore, I hope that the Government will concur with what I have been saying about our amendment. Their amendment No. 26 shows that they agree with its purpose.
      Mr. Trippier: I was waiting to hear the hon. Member for Sheffield, Central (Mr. Caborn) say that he was prepared to withdraw his amendment, because I am about to try to convince the House that the amendments tabled in the Government's name meet his point.
      This group of amendments comprise 10 Government amendments and one Opposition amendment. They are all concerned with the same point. We have tabled our amendments because of the commitment that I gave in Committee that we would consider whether an amendment was required to ensure that deductions related to cash shortages or stock deficiencies would be entirely prohibited if there was unreasonable delay between the date the cash shortage or stock deficiency occurred and the date the employer made a deduction from wages in respect of that shortage or deficiency. Having considered the matter in a fair and reasonable light, I believe that something specific is required in the Bill, and I am happy to support the amendments, which I am sure will meet the concern expressed by Opposition Members.
      The amendments will mean that, in order to make a lawful deduction on account of a cash shortage or stock deficiency, an employer will have to make the deduction no later than 12 months after either the date on which he established the existence of the shortage or deficiency in respect of which the deduction is made or, if earlier, the date when he ought reasonably to have established its existence. In layman's terms, that means that a deduction will be lawful if the employer makes the deduction within 12 months of finding out about a shortage unless he could reasonably be expected to find out about it earlier, in which case the deduction would be lawful only if he made it within 12 months of the date on which he ought to have found out about the existence of the shortage.
      That will prevent employers—I am sure that they are few in number—who decide to victimise a worker, for whatever reason, dredging up a lot of old events on which they took no action at the time and eventually starting to make deductions in the distant future. That was the point that I accepted in Committee. I thought that that was immoral. In addition, the provision will help to prevent disputes over events that happened so far back in the past that memories have become blurred about what actually took place, and to avoid resultant injustices—for example, the wrong worker suffering a deduction or shortage.
      I think that hon. Members on both sides of the House will agree that the amendments are an improvement to the Bill. I commend them to the House and ask the hon. Member for Sheffield, Central to withdraw his amendment because ours meets his point.
      Ms. Clare Short: This is another series of concessions achieved by the Opposition, and they are of some significance. Under the Bill as drafted, an employer was given the power to go back as long as he wished—10 or 20 years—to find any shortage or damage and act against the worker by making deductions or fines. We said that two people might work together in a friendly way but then fall out, and it might lead to the employer seeking to victimise the worker, going back over many years, claiming that there had been stock shortages and then claiming massive deductions from the worker.
      The imbalance in the Government's perspective was clear in the unamended Bill, in that the employer was given the right to go back timelessly, but any employee who intended to go to a tribunal to complain that he had had an illegal deduction had to act within three months or lose his legal right. In this group of amendments, the Government have conceded both points. The employer is limited in that he can go back only 11 months and the workers can take their case to a tribunal within a period that a tribunal judges reasonable. I think that that is a correct understanding of the Government's amendments. Therefore, the three-month time limit is gone.
      The Bill is still highly unacceptable, but at least the Opposition have gained improved protection for workers, little as it might be. I imagine that in the circumstances, my hon. Friend the Member for Sheffield, Central (Mr. Caborn) will be willing to withdraw our amendment, although it is notable that the Opposition amendment takes up only two lines but the Government found it necessary to have 10 lines to achieve the same objective.
      Mr. Caborn: I thought that the Government might accept our amendment, based on what my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) has said—that ours is much shorter and will take up less space and paper. Obviously, that is not so. When one sees a ray of common sense from the Government, one has to grasp it with both hands. On that basis, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Amendments made: No. 6, in page 2, line 2 leave out `of his' and insert 'employed by him'.
      No. 7, in page 2, line 4 leave out 'term' and insert `provision'.
      No. 8 in page 2, line 5 leave out from 'contact', to 'on' in line 7 and insert
      'means any provision of the contract comprised—
      (a) in one or more written terms of the contract of which the employer has given the worker a copy".
      No. 10, in page 2, line 12 leave out
      'any other express or implied term of the contract'
      and insert
      'in one or more terms of the contract (whether express or implied and, if express, whether oral or in writing)'.
      No. 11, in page 2, line 13 after 'effect', insert
      ', or (as the case may be) combined effect,'.
      No. 12, in page 2, line 17 leave out 'term' and insert 'provision'.—[Mr. Trippier.]
      Ms. Clare Short: I beg to move Amendment No. 13, in page 2, line 17 leave out from 'contract' to 'or' in line 18
      Mr. Deputy Speaker (Mr. Harold Walker): With this it will be convenient to take amendment No. 14, in page 2, line 23, leave out
      'the variation took effect or (as the case may be)'.
      Ms. Short: The purpose of the amendment is to check that the Bill means what the Minister claimed in Committee. We were concerned that under the Bill it would be impossible for an employer to produce a version of the contract—we have to be clear that an implied term of a contract can justify a fine or deduction—wave it in front of an employee's nose and then say that he was therefore making a deduction that was allowed under the contract. The Minister assured us that that was not possible. He told us that under the Bill it was absolutely necessary that the terms of the contract were clear and shown to the worker before the act or omission complained of led to the deduction or fine. Indeed, the Minister spoke in quite strong language. He said that it would be immoral if it were otherwise. I am sure that what he said was sincere and that that was his honest reading of the Bill.
      I do not claim to be right on this matter, although we think we are right on shop assistants. It is notable that the Paymaster General got that wrong as well as so many things in the Bill, but I am sure we shall come back to that.
      Let us look at clause 1(4). The protection that the Minister relied on in his arguments in Committee seems to apply only to a variation in the term of a contract, not to the provisions of the original contract. The amendment will change subsection (4) to read:
      "For the purposes of this section—

      (a) Any relevant term of a worker's contract or

      (b) any agreement or consent signified by a worker as mentioned in subsection (1)(b), shall not operate to authorise the making of any deduction, or the receipt of any payment, on account of any conduct of the worker, or any event occurring, before the agreement or consent was signified."

      I hope that the Minister will respond fully to this point.
      The Bill as drafted does not guarantee the position that the Minister said would be the correct one. The amendments are necessary to bring the Bill into line with the undertakings that he gave. That is the purpose of the amendments and we will be interested to hear the Minister's response.
      Mr. Trippier: It might be helpful to the House if I tried to explain, in speaking to these amendments, exactly what subsection (4) of clause 1 achieves. The previous subsections established that a deduction from pay may be lawful if it is provided for in the contract of employment, with any provision that provides for a deduction being given or explained in writing to the worker to ensure compliance with subsection (3) before a deduction authorised by such provision is made.
      We start from the position that both sides, employers and workers, know the rules about deductions and observe them. Subsection (4) means that, if a contract is changed so that an employer can thereafter make deductions if certain behaviour occurs, the employer is prevented from making deductions in respect of conduct that occurred before the change.
      9 pm
      We cannot provide that no change in a contract can ever be made. If we did that, contracts would be set in stone for all time. We can start, and we intend to start—this is the assurance that I gave the Committee—making changes retrospectively authorising deductions, and subsection (4) achieves that. I believe that that is sufficient protection.
      Ms. Clare Short: I am carefully following the Minister's comments. However, my reading of paragraphs
      784
      (a) and (b) of subsection (3) leads me to believe that it would require the employer to show the written terms of the contract or any other express terms of the contract to the worker at any time before making a deduction. The Bill appears to state that. However, in Committee the Minister said that he considered that that would be immoral and that the terms of the contract must have been shown to the worker before the act or omission that led to the deduction. Perhaps the drafting could have been improved. That is the point I am trying to secure and I hope that the Minister can understand that. Paragraphs (a) and (b), as drafted, do not secure that position.
      Mr. Trippier: I can only repeat to the hon. Lady the assurance that I gave her in Committee. I have expressed my understanding of the matter and that is the legal interpretation of the Bill on the advice given to me by my Department's solicitors.
      The Committee agreed with me that it was objectionable and wrong that an employer should spring a deduction on an employee at a moment's notice. For example, it would be unacceptable for an employer to decide on a Thursday evening—if wages were normally paid on a Friday—to hand a written term to the employee for an event that occurred weeks or even months before. I can assure the hon. Lady and the House that as subsection (4) is currently drafted, there is no way that we would allow retrospective authorised deductions. I believe that that will be sufficient protection.
      The amendments appear to be designed to stop employers changing the contract. There is a difference of opinion between the Government and the Opposition on this point. Under the amendments, a deduction arising from a changed term would mean that a change could be made in the term without the written consent of the worker. That is not necessary, as a contract cannot be changed without the worker giving consent, even if that consent is only implied in the fact that the worker does not repudiate it. There is no extra protection in the amendments and no reason to put extra hurdles in the way of the parties if they agree to change the contract.
      Ms. Clare Short: I have no alternative but to accept the Minister's assurances. However, I am baffled by the drafting of the Bill in that subsection (3)(a) provides:
      "a written term of the contract which the employer has shown to the worker shall be on any occasion prior to the employer making the deduction in question"—
      Mr. Trippier rose—
      Ms. Clare Short: I should like to finish my point. Subsection (4), which authorises a variation in the contract, states that such a variation
      "shall not operate to authorise the making of any deduction, or the receipt of any payment, on account of any conduct of the worker, or any other event occurring, before the variation took effect".
      It would seem that there is more protection in the case of a variation than in the other case. Therefore, the purpose of the amendment was to apply the protection that applies in the case of a variation to all contracts, not to make it impossible to make a variation. I do not think that we will settle this point tonight. I assume that the Minister and his advisers are correct, although I am not confident of that.
      Mr. Trippier: I would like to reassure the hon. Lady. I am truly not being unfair to her. I have been down this track before. She raised the matter with me, quite rightly,

      785
      on 25 February. I decided to consider it and said that I needed notice to study it in some detail. In Committee on 27 February my first words were:
      "On a point of order, Sir Anthony. The Committee will recall that, on Tuesday, I gave an undertaking to the hon. Member for Birmingham, Ladywood (Ms. Short) to confirm that my interpretation of clause 1(4) was correct. I am happy to assure the Committee, and especially the hon. Lady, that subsection 1(4) ensures that an employer cannot, by any means, introduce a term allowing a deduction to be made for conduct after the incident has occurred."—[Official Report, Standing Committee K, 27 February 1986; c. 113.]
      Ms. Short: Given the Minister's assurance, which I hope proves to be right in practice when interpreted by the courts, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Mr. Kenneth Clarke: I beg to move amendment No. 15, in page 2, line 26, leave out subsection (5).
      Mr. Speaker: With this it will be convenient to take Government amendment No. 50.
      Mr. Clarke: The amendment gives me the opportunity to return to a small matter which is causing a little agitated debate between myself and the hon. Members for Birmingham. Ladywood (Ms. Short) and for Sheffield, Central (Mr. Caborn)—whether the main Truck Acts include shop workers in the definition of manual labourers.
      I accept that a number of political issues could come between myself and the hon. Lady, and I am sure that she will agree that there are probably more substantial matters that we could argue about than the Truck Act of 1831 as applied by the Truck (Amendment) Act 1887.
      But I understand now why there have been these vigorous exchanges between myself and Labour Members. They are relying, in exactly the same way as I would rely if I were in opposition, and as I used to rely, on a letter from the economic affairs section of the Library. I would normally have relied on that briefing and, as I know its author well, I would particularly have relied on her opinion. But those who advise me have shown me the references and I have looked them up for myself and I believe that on this rare occasion the advice from the Library is wrong.
      The definition of manual worker in the main Truck Acts of 1831 was made clearer by the Truck (Amendment) Act 1887. That is explained in pages 1700 onwards of the second edition of Redgrave's "Health and Safety in Factories". There are a fascinating series of decisions about this legislation. The one relevant to shop assistants is Bound v. Lawrence, 1892, 1 Queen's Bench, 226. If anybody wants to know, bus conductors, bus drivers, railway guards and others are not protected by the Truck Acts, and shop workers and assistants could not rely upon the Acts that we are talking about.
      On the other hand, when one moves to deductions, one finds that the Truck Act 1896 extends the protection on deductions and fines to shop workers as well as workmen. It was that change which led to the phrase in the letter from the Library and is relevant to these technical amendments which are designed to clarify the definition of the word "deduction" for the purpose of the Bill. I hope that they will be acceptable to the House, including the Opposition, because the principal purpose of deleting clause 1(5) and
      786
      replacing it with the new subsections is to try to close a possible loophole that a less than scrupulous employer might try to use to evade the protection that we are giving in the Bill to those in the retail trade in relation to deductions.
      Let me give brief illustrations of the problem and what we are doing by giving three examples of what might amount to a deduction from pay. First, an employer could disagree with a worker about how much pay is due to the worker. If the employer pays what in his opinion is due, and he has a genuine disagreement with his employee, who thinks that he is entitled to more, that is not a deduction for the purpose of the Bill. That is a dispute about the contractual entitlement to pay and that will be decided by the ordinary courts, not by the industrial tribunal. That is true under any definition in the Bill.
      In the second case, the employer might pay the worker concerned less than his ordinary entitlement by taking out of the pay that he hands over some sort of fine or deduction, perhaps for disciplinary reasons or to cover a deficiency. That plainly is a deduction. We covered that in our first attempt to define a deduction and that is principally what this part of the Bill is about.
      Thirdly, an employer may deliberately pay a worker less than he owes him and may do so merely for some general reason, perhaps because he simply does not wish to comply with his full contractual obligations.
      As the Bill was originally drafted, there might have been room for doubt about whether that deliberate failure to pay amounted to a deduction. The amendments, which would put two new subsections into clause 8, provide that, when the employer pays a worker less than is properly payable, that will be a deduction, unless the reason is an error of computation concerning the amount of wages due.
      I hope that I have been reasonably clear about two technical amendments which will clarify the meaning of "deduction" and close a potentially serious loophole through which some employers might have escaped.
      Ms. Clare Short: There has been some interesting confusion about whether shop workers are covered by the Truck Acts. The Paymaster General was right when he suggested that we had relied on the briefing from the Library. Such briefings are normally second to none and I am not yet convinced that the Library is wrong in this case. We shall look into the matter, but I accept that it is possible that the Library is wrong and that is why we were misled.
      However, it seems that the national multiple chain in Blackburn was misled in the same way as our Library, because it told its workers that they will have cashless pay imposed on them. It seems that that major company is under the same illusion—if it be an illusion—as the Library.
      The Government's reasons for the amendment are not objectionable to the Opposition. Indeed, if the Paymaster General answers a question in the affirmative, we shall warmly welcome amendment No. 50. The amendment provides:
      "Where the total amount of any wages that are paid on any occasion by an employer to any worker employed by him is less than the total amount of the wages that are properly payable by him to the worker"
      and the underpayment is not due to an error of computation, it will count as a deduction.
      If an employer is paying illegal wages under part II of the Bill, will he be caught? Does the amendment mean that

      787
      workers who are illegally underpaid will acquire the right to go to a tribunal and to take action immediately, without having to go through the wages inspectorate which never prosecutes? It seems to me that that might be the meaning of the amendment.
      What are the wages that are "properly payable" to the worker? Are they the wages that are normally paid or are they the wages that are legally required? If an employer is making illegal underpayments, surely they are not wages that are "properly payable".
      The amendment says that a deficiency shall be treated as a deduction
      "for the purpose of this Part",
      but I cannot see that that excludes my interpretation.
      I am enormously interested in amendment No. 50. It could be an enormous change of heart by the Government, although I think that it is probably an accident. The Government may have stumbled into giving workers who have received illegal underpayments a remedy that would be easier than that currently available to them, given that there are too few wages inspectors and that the wages inspectorate is obsessed with being friendly with employers, does not collect adequate information on the needs of workers and has an absolute policy of not prosecuting on first offences. Perhaps my interpretation of the amendment is fanciful, but it seems to me to be a possible interpretation.
      Mr. Martin: May I ask the Minister a few questions about a matter concerning which I have already asked various questions? I do not expect him to recall them because his hon. Friend the Under-Secretary of State for Employment, the hon. Member for Galloway and Upper Nithsdale (Mr. Lang) answered them. It relates to an organisation that runs a Manpower Services Commission project, for which I understand the Paymaster General is ultimately responsible. A complaint about delay was made about that organisation. It was not the first time that such a complaint had been brought to my attention. It was that the sponsors of the project, who were therefore acting on behalf of the Government, had delayed paying the bus fares of those who were on MSC projects.
      9.15 pm
      In view of what the Minister has said, would this deliberate delay in the payment of fares be regarded as a deduction from wages? If so, would employees be entitled to take the matter to an industrial tribunal? It would be helpful to have an answer to that question.
      Wages councils cover only certain people in certain services. The catering industry is one such service; hairdressing is another. The Paymaster General knows that, on certain MSC projects, meals are provided for the elderly. That is perfectly satisfactory, but all the employees involved in those projects are doing a job identical to the job performed by those in the catering industry. They are working in kitchens. They are serving, preparing and delivering food. If necessary, do those employees have recourse to the wages councils and to the wages inspectorate?
      Mr. Kenneth Clarke: The previous disagreement between us was because both of us were relying upon what is usually completely reliable advice, but on that occasion it came to differing conclusions. On this occasion I am flying somewhat more blind. If I sail perfectly into error on this occasion, I shall write to the hon. Lady and correct what I am about to say.
      788
      The hon. Lady asked a very interesting question about what would happen to those employees who are covered by the wages councils as far as this definition of "deduction" is concerned. I understand that, when a deliberate deduction is made by the employer, it will be regarded as a deduction and will be subject to the provisions of the Bill. The dispute can be solved by an industrial tribunal. If, however, an employer makes a computation error—if, in other words, he makes a mistake—the matter will go to the courts. If there is a disagreement between the parties about what wages are properly due, that also will go to the courts. If, as I say, there is a deliberate deduction from what the employer knows to be due, it will be covered by the Bill and the matter will go before an industrial tribunal.
      To relate that to the wages council provisions, if an employer is paying less than a wages council's required rate and if he knows that he is paying less than that which is properly due, which means that he is intentionally paying less than the wages council's rate, my understanding is that the hon. Lady is right and that the protections that are afforded under this part of the Bill will apply. If, however, the employer does not realise that a higher rate is properly due and he makes a computation error, that will not count as a deduction under the Bill and the matter will have to be resolved by the courts if the wages inspectorate is unable to sort it out in the ordinary way.
      Ms. Short: I am grateful to the Paymaster General. I agree with his interpretation of the wording of this amendment. May I ask him for an undertaking: that if we are both right he will not amend the Bill; he will leave it as it is, so that workers who are illegally underpaid will have the right to go to an industrial tribunal on the grounds that they have suffered an illegal deduction?
      Mr. Clarke: I am content to give that undertaking. When an employer deliberately makes a deduction below that which he knows to be lawfully due, that will be covered by this part of the Bill.
      I know that the Bill is more limited in terms of protection than the Opposition would like, but everything that we have said about deductions will apply if an employer deliberately pays less than that which he knows legally to be the entitlement of the employee. An error or disagreement about the rate would be resolved in the courts.
      To settle the bus fares issue, we must turn to the definition of wages in clause 7. I shall write to the hon. Member for Glasgow, Springburn (Mr. Martin) about the second part of his question, which I did not follow because I was considering the first part and listening with only one ear. The repayment of bus fares and other expenses is not covered by the definition of wages in clause 7, so a failure to pay extra expenses is not relevant. Clause 7(2)(a) expressly excludes from the definition of wages any payment in respect of expenses incurred by the employee.
      Mr. Nellist: I understand that the Minister thinks that it is wrong for an employer wilfully to allow somebody to be paid less than that to which they are legally entitled, and that there should be some redress.
      After I argued with the junior Minister in Committee I received a letter saying that anyone in receipt of family income supplement whose wages fell below the family income supplement baseline because of a deduction,

      789
      would not have the right to claim anything extra from the DHSS because the assessment of FIS is based on the notional gross wage before deduction. Is there not a parallel between that and the concession that has just been made to my hon. Friend the Member for Birmingham, Ladywood (Ms. Short), in that the DHSS would willingly allow someone to fall below the official Government-defined poverty line by disregarding regular deductions?
      Mr. Clarke: That was a good try. I do not accept the analogy. We are talking about a deduction by the employer. If the employer knows what his employee is legally entitled to, and pays less than that deliberately, he is making a deduction and must be prepared to comply with the Bill's provisions; otherwise, the employee has a remedy.
      The way in which family income supplement is assessed and the definition of income for the purpose of making the annual assessment of FIS entitlement is a matter for DHSS regulations. The hon. Member for Coventry, South-East (Mr. Nellist) will have to raise the matter with my right hon. Friend the Secretary of State for Social Services if he wants to argue that the rules for FIS should be changed.
      Amendment agreed to.
      Mr. Trippier: I beg to move amendment No. 16, in page 2, line 40 at end insert—
      '(aa) to any deduction from a worker's wages made by his employer, or any payment received from a worker by his employer, where the purpose of deduction or payment is the reimbursement of the employer in respect of any overpayment of wages made (for any reason) by the employer to the worker;'.
      Mr. Speaker: With this it will be convenient to take Government amendment No. 18.
      Mr. Trippier: Under this amendment the provisions of part I will not apply to deductions made by an employer or payments received by him to recover earlier overpayment of wages. Deductions to recover overpayments of wages should not, in the Government's view, be caught by the Bill and employers should not be hampered in recovering such payments.
      Since the Bill was published, representations have been made to the Government that it would lead to difficulties in payroll administration if it was not made clear that deductions from wages made merely to recover earlier overpayments of wages were not covered by the Bill.
      It is the practice of some firms to make small overpayments of wages, for reasons of administrative convenience, that are later recovered. An example is where information on bonus or overtime payments are not available in the pay office until after the wages have to be paid—or the computer run—so a standard sum is paid with a small adjustment, up or down, the following week. Without this amendment, such downward adjustments would be deductions for the purposes of the Bill and thus unlawful unless explicitly provided for in the contract.
      The effect would be to require contracts of employment to be rewritten to ensure that the employer does not fall foul of the Bill if he ever makes adjustments to recover anything overpaid, accidentally or for reasons of administrative convenience, in an earlier payment of wages. We do not want to cause such an upheaval in personnel practices and consequently propose to disapply the Bill to deductions to recover earlier overpayments.
      790
      There is no possibility of injustice arising from that. If a deduction is to recover an overpayment, the worker has received what is due to him. If the worker disputes that the deduction is for that purpose, he can, of course, complain to an industrial tribunal that will have to form a view on the matter.
      Amendment No. 18 is required to avoid a situation where the Bill would make the enforcement of court or tribunal orders ineffective. Without the amendment, an employer who had obtained a court or tribunal order against a worker requiring the worker to pay an amount to the employer would be in breach of clause 1 of the Bill when he received a payment from the worker under the order. That would happen because, when the employer received the payment, it would not have been authorised by statute, by the contract, or with the prior written agreement of the worker. So the requirements of clause 1(2) of the Bill would not be met. It would obviously be a legal nonsense if an employer who obtained a court order against a worker found that he could not obtain the amount from the worker without being in breach of the Bill.
      The amendment will resolve that by removing deductions and payments in such circumstances from the scope of clause 1. Payments may be received from the worker by the employer to meet the amount specified in the court or tribunal order without complying with clause 1(2). Alternatively, deductions from wages to meet the amount specified may be made without complying with clause 1(1), provided that the worker has given his prior agreement or consent in writing. The latter is a reasonable safeguard for the worker because it ensures that deductions to satisfy the order will be lawful only if he has agreed that the sum that he has been ordered to pay can be recovered by deduction from his wages. Furthermore, it is likely that if the employer decides to recover the amount by deductions, he will agree to do so in instalments, which is an obvious benefit to the worker.
      Where the employer fails to obtain the prior written agreement of the worker, the provisions of clause I will apply and the deductions from wages will be in breach of the Bill. A worker would then have the right to complain to an industrial tribunal that an unlawful deduction had been made.
      This amendment is essential to resolve an unintended consequence of the Bill and I ask the House to accept it.
      Amendment agreed to.
      Amendments made: No. 17, in page 3, line 11, leave out 'term' and insert 'provision'.
      No. 18, in page 3, line 27, at end insert—
      '(e) to any deduction from a worker's wages made by his employer with his prior agreement or consent signified in writing, or any payment received from a worker by his employer, where the purpose of the deduction or payment is the satisfaction (whether wholly or in part) of an order of a court or tribunal requiring the payment of any amount by the worker to the employer.'.—[Mr. Trippier.]

    Clause 2
      DEDUCTIONS FROM WAGES OF WORKERS IN RETAIL

        EMPLOYMENT ON ACCOUNT OF CASH SHORTAGES ETC.
        Mr. Trippier: I beg to move amendment No. 21, in page 3, leave out lines 43 and 44 and insert—
        "pay day", in relation to a worker, means a day on which wages are payable to the worker:'.
        Mr. Speaker: With this we shall take Government amendment No. 34.
        Mr. Trippier: These two amendments are concerned with definitions—the definitions of "pay day" and of "demand for payment" in clauses 2 and 3. The two expressions are unclear without the amendments. The amendments are for clarification and do not change policy.
        Clauses 2 and 3 introduce controls on deductions and payments on account of cash shortages or stock deficiencies, which are limited to 10 per cent. of any wages payable to a worker on a pay day. The question is whether the pay day should be the day on which wages are payable—that is, due to be paid—or the day on which they are actually paid.
        Amendment No. 21 changes the definition of pay day in clauses 2 and 3 from
        "any day on which any wages are paid to a worker"
        to
        "a day on which wages are payable to the worker".
        The amendment is required because the day on which wages are paid is not always a precise concept. When wages are paid by direct debit to a bank account, it is not clear whether the day on which wages are paid is to be regarded as the day on which the employer authorises payment or the day on which it is credited to the worker's bank account, which will be later. The amendment does not, however, alter the way in which the controls on deductions related to cash shortages and stock deficiencies operate.
        9.30 pm
        Amendment No. 34 clarifies what the phrase "demand for payment" means in clause 3 and how and when a demand is to be made. Clause 3, inter alia, requires that an employer may not lawfully receive a payment on account of a cash shortage or stock deficiency unless he makes a demand for payment in writing on a pay day.
        The amendment provides that a demand for payment is made if it is given to the worker, posted to the worker's last known address or left at his last known address either on the pay day or, if the pay day is not a working day—if it is a Bank Holiday—on the first working day of the employer's business following that pay day. The amendment is needed so that employers and workers can clearly understand how and when a demand for payment must be made.
        Amendment agreed to.
        Mr. Trippier: I beg to move amendment No. 22, in page 3, line 46, after 'worker', insert
        '(whether on a regular basis or not)'.
        Mr. Speaker: With this it will be convenient to take the following amendments: No. 23, in page 4, line 1, leave out
        'directly with members of the public'.
        Government amendments Nos. 24 and 25.
        Mr. Trippier: The amendments fulfil an undertaking that I gave in Committee to consider further the need to ensure that to protections given by clauses 2 and 3, which ensure that deductions from wages or payments made by the worker to the employer that are related to cash shortages or stock deficiencies are limited to 10 per cent. of gross wages, apply to all workers who need such protection. As drafted, the Bill covers those workers who are engaged in retail transactions directly with members of the public. I think that it was the hon. Member for
        792
        Birmingham, Ladywood (Ms. Short) who said that those working in hospital or factory canteens might not be so covered as they sell goods to fellow workers rather than to members of the public.
        The amendment ensures that the protection applies to all workers who are engaged in the sale or supply of goods to members of the public, fellow workers or other individuals in their personal capacities. The amendment ensures also that a person who sells both to companies and to the public is fully covered in respect of all his sales.
        I hope that hon. Members will support the amendment and those grouped with it, which provide a useful clarification of the Bill and extend the protection that it offers. Amendment No. 23 was tabled by the Opposition and it was designed to achieve the same effect as amendment No. 24. In the light of the Government's amendment, I hope that the Opposition will withdraw amendment No. 23.
        Ms. Clare Short: This is another small concession, but one of some consequence to some workers, which has been won by the Opposition The House will be aware that it is the Opposition's view that the limitation of fines or deductions to 10 per cent. of gross wages should apply to all workers for all disciplinary purposes. We advanced that argument strongly when discussing the first group of amendments. I am certain that we won the arguments, but unfortunately we do not have enough votes in this place to amend the Bill, although the time seems to be rapidly approaching when we shall have them.
        The amendment is of significance to all workers who handle stock or cash but do not deal directly with members of the public. An obvious example is those who work in staff canteens. There are many who work in that capacity who do not deal with the public but handle a great deal of food, stock and cash. If the amendment were not made, they would be liable to deductions or fines up to 100 per cent. rather than to the 10 per cent. limit which the Government, for some strange reason, have decided to provide as a protection for retail workers only.
        The Minister has explained that the protection has been given to retail workers because it is in the retail sector that there is the most worry about cash shortage and stock deficiencies. He appears to be telling us that this is the sector in which employers—that is the group to which the Government talk—think that a lot of fiddling is going on and in which deductions should be made. It seems to turn logic on its head to say that because employers are so concerned, the deductions that they make should be limited. We are grateful for small mercies and glad that the protection for workers in retailing extends to workers in canteens who deal with cash and stock, but with fellow workers rather than members of the public.
        Mr. Nellist: Perhaps my hon. Friend could refresh my memory about the other half of the reason that the Minister gave. Was not his justification for not accepting our amendment to extend the 10 per cent. limit to all workers that, unless employers could fine employees, they would not be willing to take more workers on, which would lead to increased unemployment? Is not confining the limit to retailing effectively saying that the Minister expects more jobs to be lost in retailing?
        Ms. Short: My hon. Friend is right. The Minister used that argument. My hon. Friend has quite fairly extended

        793
        the logic and exposed the ridiculousness of the Government's case for not extending the 10 per cent. limit.
        The amendment will protect some workers. It will protect canteen workers and probably others whom we have not thought of. We are glad of that, but wish that we could have achieved the same for more workers. As the Government have conceded the point, I shall not press the amendment.
        Mr. Martin: Is there any way in which the Minister can legislate to prevent employers from deducting trivial amounts from employees? Perhaps I could give an example.
        In 1978, when I was a union officer, the Ayrshire and Arran health board, which is not noted for being a good employer, called in the police because it alleged that a woman canteen worker had a pint of milk in her bag. The police charged her and the procurator fiscal in Ayrshire decided that there was no case to answer.
        The management sacked the woman, though, so I had to take the matter to an unfair dismissal tribunal. The union's time and resources were tied up. The unfair dismissal tribunal found in favour of the woman to the extent that she got a re-engagement order. For the sake of a pint of milk, the matter trundled on for months. Quite substantial Health Service resources must have been involved. Many of the officials who were sacking the woman for taking the pint of milk must have lifted a telephone from time to time, perhaps to tell their wives that they would be late, and used more of the health board's money than the lady in question.
        It must be possible to put something into the Bill to prevent the small minority of employers who would do something so stupid from doing what the Ayrshire and Arran health board did. Had there been such provision, a great deal of money would have been saved.
        Mr. Trippier: I do not know the background to the case that the hon. Member for Glasgow, Springburn (Mr. Martin) has mentioned. Perhaps he will elaborate later. I do not know whether the bottle came to be missing intentionally or accidentally.
        There must be a clear understanding in a contract that deductions can be made. It may be that, when the matter was drawn to the attention of the industrial tribunal, that understanding was not in the contract, so the employer was taking advantage of the position by dismissing the worker without any deduction being allowable under the terms and conditions of service. Perhaps the hon. Gentleman and his trade union colleagues tripped the employer up on that.
        The provision in the Bill regarding that is perfectly adequate, and the Government do not wish to intervene further in the relationship between employers and workers.
        Amendment agreed to.
        Amendments made:
        No. 24, in page 4, leave out line 2 and insert
        'or with fellow workers or other individuals in their personal capacities;'.
        No. 25, in page 4, line 5, leave out
        'to members of the public'.
        No. 26, in page 4, line 7, at end insert—
        '(2A) Where the employer of a worker in retail employment makes a deduction from the worker's wages on account of a cash shortage or stock deficiency, the employer shall not be treated
        794
        as making the deduction in accordance with section 1(1) unless (in addition to the requirements of that provision being satisfied with respect to the deduction)—

        (a) the deduction is made, or

        (b) in the case of a deduction which is one of a series of deductions relating to the shortage or deficiency, the first deduction in the series was made,

        not later than the end of the period of 12 months beginning with the date when the employer established the existence of the shortage or deficiency or (if earlier) the date when he ought reasonably to have done so.'.
        No. 27, in page 4, line 31, after 'provision', insert 'and subsection (2A) above' .—[Mr. Kenneth Clarke.]

    Clause 3

      PAYMENTS BY WORKERS IN RETAIL EMPLOYMENT ON ACCOUNT OF CASH SHORTAGES ETC.
      No. 9, in page 4, line 44 leave out 'subsection (2)' and insert 'this section'.
      No. 31, in page 5, leave out lines 6 to 11 and insert—
      '(2A) A demand for payment in respect of a particular cash shortage or stock deficiency, or (in the case of a series of such demands) the first such demand, shall not be made—

      (a) earlier than the first pay day of the worker following the date when he is notified of his total liability in respect of the shortage or deficiency in pursuance of subsection (1)(a) or, where he is so notified on a pay day, earlier than that day, or

      (b) later than the end of the period of 12 months beginning with the date when the employer established the existence of the shortage or deficiency or (if earlier) on the date when he ought reasonably to have done so.'.

      No. 32, in page 5, line 14 leave out 'subsection (2)' and insert 'this section'.
      No. 33, in page 5, line 25 leave out 'subsection (2)' and insert 'this section'.
      No. 34, in page 5, line 29, at end insert
      '(5) For the purposes of this Part a demand for payment shall be treated as made by the employer on one of the worker's pay days if it is given to the worker, or posted to, or left at, his last known address—

      (a) on that pay day, or

      (b) in the case of a pay day which is not a working day of the employer's business, on the first such working day following that pay day. '.—[Mr. Kenneth Clarke.]

    Clause 4

      PROVISIONS SUPPLEMENTARY TO SS. 2 AND 3
      Mr, Trippier: I beg to move amendment No. 35, in page 5, line 30, leave out subsection (1) and insert—
      '(1) In this section "final instalment of wages", in relation to a worker, means—

      (a) the amount of wages payable to the worker which consists of or includes an amount payable by way of contractual remuneration in respect of the last of the periods for which he is employed under his contract prior to its termination for any reason (but excluding any wages referable to any earlier such period), or

      (b) where an amount in lieu of notice is paid to the worker later than the amount referred to in paragraph (a), the amount so paid,

      in each case whether the amount in question is paid before or after the termination of the worker's contract.'.
      Mr. Speaker: With this it will be convenient to take Government amendments Nos. 36, 37 and 40.
      Mr. Trippier: These are a set of technical amendments to the first three subsections of clause 4. The subsections ensure that the limits on deductions to payments related to cash shortages or stock deficiencies established by clauses 2 and 3 do not apply to the final payment of wages.
      Mr. Eastham: As the Minister rightly said, these are technical amendments. I was intrigued by the Government's subtle use of the word "instalment", as, originally, the word "payment" was used. I do not understand the reason for that change, and I am always suspicious when sophisticated language is used. As a consequence of that change, how much more will workers lose? I am not a lawyer, and perhaps the answer is obvious to a barrister or solicitor.
      I also wish to ask about the reference to
      "an amount in lieu of notice."
      We are sometimes, rightfully, suspicious when an employer decides to get rid of an employee who, if he must leave the premises immediately, is entitled to pay in lieu of notice. I wonder whether the amendment has been drafted in such a way that the accumulation of 10 per cent. deductions, which could be fabricated, could mean that an employer could withhold the pay in lieu of notice, thus practically sending the worker home with nothing. I should be grateful if the Minister could clarify those points for me because I am a little baffled.
      Mr. Caborn: I wish to follow that point by asking about people who have accrued holiday pay. Sometimes the accumulation of holiday pay depends on the time served in a company or at a place of work. If holiday pay were to be paid to a person leaving a company, would that also be subject to the type of deduction to which my hon. Friend the Member for Manchester, Blackley (Mr. Eastham) has referred?
      Will the Bill have a different effect if the new type of pay slips which the Chancellor of the Exchequer announced recently were implemented, in which 20 per cent. of one's wages can be tax-free? If so, does that mean that it would also be deduction-free in relation to the 10 per cent.? I should be interested to know the answer, because it might throw a new light on the Bill, given the new wages structure that the Chancellor of the Exchequer apparently wants to introduce.
      9.45 pm
      Ms. Clare Short: The Minister spoke extremely briefly to the amendments. He did not explain why the Government had introduced them. Perhaps that was because he got into something of a muddle in Committee about what clause 4(1) really meant, about what was covered and about what was included in the final payment of wages. I suspect that the amended drafting is considered to be better, and it probably is. However, it would be interesting to hear the Minister explain its introduction.
      We must not let this opportunity pass without saying how strongly we object to the Government's definition of the final payment of wages, and the way in which they have exempted that final payment from any protection, such as the 10 per cent. limitation for a small group of retail workers who are accused of cash shortages or stock deficiencies. The way in which the amendment provides for payment in lieu of notice to be treated is an invitation to an employer to confiscate the whole payment in lieu of notice when someone is being sacked as a result of a dispute. It is outrageous that the Government should invite employers to treat their workers like that. If there is a case for giving a 10 per cent. protection to workers, it also extends to the final payment of wages.
      Judging by the way in which the Government have drafted the provision and have drawn attention to money
      796
      paid in lieu of notice, they are telling employers that, if they decide to sack someone and to accuse them of something that they have not done, they can deduct all the money paid in lieu of notice. The Government are saying that they can do that if they want to be spiteful, and that they will go to great trouble to draft the Bill to enable them to do so. We have here yet another example of the Government's mean-mindedness, which infects every part of the Bill.
      Mr. Trippier: That is a bit thick. The hon. Member for Birmingham, Ladywood (Ms. Short) said that the Government were mean-minded. The hon. Lady knows from the amendments that I have tabled that I have been anxious to meet many of the points made in Committee. She has been churlish in remarking on the Government's attitude and my attitude, and has claimed credit every lime she thinks that the Labour party has pulled something off. There has been no recognition of the fact that we debated the matter fully in Committee and that I sometimes accepted the points made. That is unfair.
      Ms. Clare Short: Will the Minister give way?
      Mr. Trippier: I shall give way in a moment. The attitude adopted by the hon. Member for Ladywood would not, I am sure, have been adopted by the hon. Member for Bow and Poplar (Mr. Mikardo). But I shall try to respond to some of the points made in this short debate.
      Ms. Short: It is, perhaps, appropriate that we should fall out at this late stage. But we have made it clear to the Minister throughout that the Bill is rotten. The Bill's whole nasty approach will lead to an increase in poverty among the poorest paid workers in the country. We also made it clear that we did not think that there was much point in simply getting angry with one another. We wanted to make a detailed case against the Bill, and that is what we tried to do in Committee, instead of shouting at one another incoherently.
      In the course of that long dispute, some minor concessions were won. We were grateful for every scrap that we could get. Each time we got a scrap, we said that it was a scrap and that it did not affect the fundamentally objectionable nature of the Bill. However, we were grateful for the scraps, because they would protect some workers. That remains the position. The Minister knows it. There has never been any dispute about it. For him to suggest that we are somehow changing our position at this late stage is quite wrong.
      Mr. Trippier: I am not suggesting in any way that the Opposition have changed their position. I respect the fact that they have opposed the Bill throughout and, have done so, as far as they were able, in a constructive manner. I am simply saying that I think the hon. Lady has been unfair today. I was referring not to the Opposition, just to the hon. Lady.
      The hon. Member for Sheffield, Central (Mr. Caborn) referred to holiday pay. Clause 7 deals with the meaning of wages and what is incorporated in the definition of wages under clause 4. The hon. Gentleman's point is covered in clause 7(1)(a).
      I do not agree with the hon. Member for Ladywood when she says that the Opposition do not like the fact that any outstanding moneys which are due to an employer could not or should not be collected on the last day that a payment is made to a worker. If money is due to an

      797
      employer, it is absolutely right that it should be collected. If there is not sufficient money in the gross pay which is paid in the last payment, it is absolutely right that the employer should have recourse to a court of law, which he does through civil proceedings, for collection of the money, although I suspect, as I have said in Committee, that on many occasions an employer would not go to that trouble.
      I am under an obligation to deal with a point raised by the hon. Member for Manchester, Blackley (Mr. Eastham). The amendment changes the term "final payment of wages" to "final instalment of wages". Although that is of no legal consequence—I do not want the hon. Gentleman to read anything into this—it conveys more satisfactorily the concept that the payment is the final one in a series of periodic instalments of wages. The amendment also shortens and clarifies the proposed subsection. If the Opposition wish to be consistent—they have said that they like the shorter wording in the Bill—perhaps they will agree to the amendments which are purely technical.
      Amendment agreed to.
      Amendments made: No. 36, in page 5, line 44, leave out from 'from' to end of line 6 on page 6 and insert
      'the worker's final instalment of wages. ' .
      No. 37, in page 6, line 9, leave out
      'payment of wages is made'
      and insert
      'instalment of wages is paid, but (whether or not the requirements of section 1(2) would otherwise be satisfied with respect to it) his employer shall not be treated as receiving any such payment in accordance with section 1(2) if the payment was first required to be made after the end of the period referred to in section 3(2A) (b).'.
      No. 38, in page 6, line 10, at end insert—
      '(3A) Legal proceedings by the employer of a worker in retail employment for the recovery from the worker of any amount in respect of a cash shortage or stock deficiency shall not be instituted by the employer after the end of the period referred to in section 3(2A)(b) unless the employer has within that period made a demand for payment in respect of that amount in accordance with section 3. ' .
      No. 39, in page 6, line 11, leave out from 'that' to 'on' in line 13 and insert
      'the employer of a worker in retail employment is (in accordance with section 1(2), as it applies apart from section 3(1)) entitled to receive any amount from the worker'.
      No. 40, in page 6, line 21, leave out
      'payment of wages is paid'
      and insert
      'instalment of wages is paid'.—[Mr. Trippier.]

    Clause 5

      COMPLAINTS TO INDUSTRIAL TRIBUNALS IN RESPECT OF UNAUTHORISED DEDUCTIONS ETC.
      Amendments made: No. 41, in page 6, line 40, after 1(1)', insert
      '(including a deduction made in contravention of that provision as it applies by virtue of section 2(2A))'.
      No. 42, in page 7, line 6, leave out `(2)'.—[Mr. Trippier.]

    Clause 7

      MEANING OF "WAGES"
      Mr. Kenneth Clarke: I beg to move amendment No. 45, in page 9, line 23, at end insert—
      '(aa) any payment by way of an advance under an agreement for a loan or by way of an advance of wages (but without prejudice to the application of section 1(1) to any deduction made from the worker's wages in respect of any such advance);'.
      Mr. Speaker: With this it will be convenient to take the following amendments: No 46, in page 9, line 26, at end insert
      ', allowance or gratuity in connection with the worker's retirement or as compensation for loss of office;'.
      No. 47, in page 9, line 29, at end insert—
      '(2A) Where any payment in the nature of a non-contractual bonus is (for any reason) made to a worker by his employer, then, for the purposes of this Part, the amount of the payment shall—

      (a) be treated as wages of the worker, and

      (b) be treated as payable to him as such on the day on which the payment is made .' .

      Mr. Clarke: It is a long time since I have heard technical and drafting amendments debated with such heat, vigour and care on Report, but I hesitate to say that amendments Nos. 45, 46 and 47 are technical amendments. They deal with clause 7 which sets out the definition of wages. They are designed to sort out some confusion in the way loans and advances of wages, lump sums on retirement or loss of office and non-contractual bonuses are treated in the definition of wages. I commend them to the House.
      Mr. Nellist: It is only 9.52 pm and I do not wish to disappoint the Paymaster General.
      Mr. Speaker: It is no disappointment—the hon. Member has all night.
      Mr. Nellist: Hon. Members who have taken part in the debate, which has lasted for about five hours, may be content to leave this group of technical amendments so that their hon. Friends from London can deal with the EEC and parental leave for child care. However, before we conclude, I shall ask the Paymaster General for an explanation of the effects of the Government amendments. It is not good enough, even at the tail end of a long day's debate, to state that the amendments are additions to matters outside the definition of wages. Subsection (2) payments are excluded from subsection (1) sums. There was heated debate in Committee on the sums mentioned in subsection (1), especially about bonuses and piecework rates. My hon. Friend the Member for Sheffield, Central (Mr. Caborn) moved an amendment on that point. He may think that the points he made then are still worthy of being repeated.
      Why are there such large changes in the definitions of wages, especially with respect to the exclusion of benefits in kind, in the Wages Bill 1986 compared with the Truck Act 1831? The original definitions in the Truck Acts are superseded by the provisions in clause 7. There was no mention of many of the benefits in kind which are still pertinent to workers, including tied accommodation, meals on premises and-I hesitate to say this because of our earlier exchanges - company cars, which the Minister assured me were a benefit in kind. By not mentioning those items, does clause 7 mean that they are up for grabs when it comes to deductions? If the deduction

      799
      is limited to 10 per cent. for specified items, and other items are not mentioned, does that mean that those that are not mentioned can be made the subject of larger deductions by employers, if they wish?
      Mr. Kenneth Clarke: The hon. Member for Coventry, South-East (Mr. Nellist) is entirely within his rights to ask for a more careful explanation if he is worried about these technical amendments. The starting point of his query was the question: why are we taking such care to draft the definition of wages in this way and moving a little from the definition in the 1831 Act? I remind him that the Bill contains two innovations which make it important that we get the definition right and which will assist those in tribunals and elsewhere who have to apply it.
      One innovation is the 10 per cent. limit on the deductions that can be made from the wages of retail workers and the other is the new right of access to an industrial tribunal where there is a dispute about the deductions. It is important, especially in calculating the 10 per cent. limit, to know exactly what that limit is and to have an extremely precise definition of wages. The amendment has been moved because it represents a further attempt to define exactly what is meant by wages and what is excluded.
      The hon. Member for Coventry, South-East correctly spotted the fact that all three amendments are concerned with additions to the list of matters which, for the purposes of the Bill, are not to be regarded as wages. Although that may sound disadvantageous, it is not.
      On amendment No. 45, by ensuring that loans and advances of wages are not included in the meaning of wages, one reduces the total amount that counts as wages and therefore reduces the amount that the employer can lawfully deduct under the 10 per cent. limit. If loans or advances of wages were permitted to be added to the total sum for the purposes of this definition, the effect would be to weaken the protection to the worker, because 10 per cent. of the lawful deduction would be a higher sum.
      Amendment No. 46 defines payment by way of payments that are akin to pensions, which are already excluded in the Bill as originally drafted and which were considered in Standing Committee. We consider that lump sums paid on retirement and sums paid in compensation for loss of office are similar to payments by way of pension. They have been excluded from the definition of wages because we believe that disputes about such matters should be resolved by the courts and are not really within the compass and competence of the tribunals which would otherwise find themselves being drawn into this somewhat complex area.
      Mr. Nellist: Will the Minister give way on that point?
      Mr. Clark: May I just answer all the hon. Gentleman's queries?
      Amendment 47 deals with payments made to a worker by his employer of sums to which the worker is not
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      contractually entitled. It can be called a "non-contractual bonus". When those sums are paid to the worker, they would not, as originally defined in the Bill, count as wages because they are not legally payable. The amendment ensures that, for the purposes of part 1 of the Bill, repayments are treated as wages and subject to the provisions.
      Mr. Nellist: Does amendment No. 46 include accrued holiday pay in the payment of money to workers for redundancy and so on?
      Mr. Clarke: I had sat down because of the 10 o'clock rule. Holiday pay is already dealt with in the Bill as drafted. In clause 7 on page 9 holiday pay is "wages" for the purpose of this part of the Bill.
      Amendment agreed to.
      Amendments made: No. 46, in page 9, line 26 at end insert—
      ', allowance or gratuity in connection with the worker's retirement or as compensation for loss of office;'.
      No. 47, in page 9, line 29, at end insert
      '(2A) Where any.payment in the nature of a non-contractual bonus is (for any reason) made to a worker by his employer, then, for the purposes of this Part, the amount of the payment shall—

      (a) be treated as wages of the worker, and

      (b) be treated as payable to him as such on the day on which the payment is made.'.—[Mr. Kenneth Clarke.]

    Clause 8

      GENERAL INTERPRETATION OF PART 1
      Amendments made: No. 48, in page 10, line 3, leave out 'under his contract'.
      No. 49, in page 10, line 5, at end insert—
      'and "employed", in relation to a worker, accordingly means employed under his contract;'.
      No. 50, in page 10, line 30, at end insert—
      '(2A) Where the total amount of any wages that are paid on any occasion by an employer to any worker employed by him is less than the total amount of the wages that are properly payable by him to the worker on that occasion (after deductions) then, except in so far as the deficiency is attributable to an error of computation, the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker's wages on that occasion.
      (2B) In subsection (2A) the reference to an en-or of computation is a reference to an error of any description on the part of the employer affecting the computation by him of the gross amount of the wages that are properly payable by him to the worker on that occasion.'.
      No. 51, in page 10, line 32, leave out 'of his' and insert 'employed by him'.—[Mr. Kenneth Clarke.]
      Further consideration of the Bill adjourned.—[Mr. Kenneth Clarke.]
      Bill, as amended (in the Standing Committee), to be further considered tomorrow.

  Equal Opportunities
  Mr. Speaker: I must announce to the House that I have selected the amendment in the name of the Leader of the Opposition.
  10.1 pm
  The Minister of State, Home Office (Mr. David Waddington): I beg to move,
  That this House takes note of European Community Documents Nos. 6871/83, draft proposals for a Directive on the implementation of the principle of equal treatment of men and women in occupational social security schemes, 5825/1/84, draft Directive on the application of the principle of equal treatment for men and women in self employed occupations including agriculture and on protection during pregnancy and maternity, and 4118/86, communication from the Commission to the Council concerning a medium term Community programme (1986/90) on equal opportunities for women; and endorses the Government's commitment to the principle of equal treatment while seeking to ensure that unnecessary burdens are not imposed on business in the United Kingdom.
  I welcome this opportunity to debate these European Community documents. The draft directive on equal treatment in self-employment was originally proposed by the European Commission in 1984. We share its underlying objectives but along with several other member states doubt the wisdom of some of the proposals.
  Its objectives are the elimination of any direct or indirect discrimination on the ground of sex which has the effect of preventing a person from obtaining a loan or other facilities to set up or run a business; the removal of legal and financial barriers to business partnerships between husband and wife, or the employment of one by the other; the recognition of a spouse's right to build up separate entitlement to maternity, invalidity, social security and retirement benefits; and the creation for such spouses of a legal right to receive consideration for the work they contribute, whether in cash or in some other form.
  Of course, the Sex Discrimination Act 1975 already deals with some of these matters. In particular, it makes it unlawful to discriminate in the provision of facilities such as loans on grounds of sex. The other point to stress is that there is now no obstacle in United Kingdom law to prevent spouses establishing a formal business relationship if they wish to do so. So article 5 worries us not at all. The difficulty with the directive lies, I think, in article 7, the detailed requirements of which seem likely to create as many problems as they attempt to solve. It is not in our view sensible to provide the spouse of a self-employed person with a legal right to receive consideration in cash or in kind for the work he or she performs. It is a principle of our legislation that it should not seek to regulate private relationships where there is no intention to create a legal business relationship. I am sure that no hon. Member wants to see husbands and wives taking their housekeeping disputes to the courts, but that could easily be the result of this sort of provision.
  No one in the Government under-estimates the importance of self-employment and I am told that the number of self-employed women increased by some 25 per cent. between 1983 and 1985. It is Government policy to create a climate where their enterprise can prosper and to ensure that there are no unreasonable obstacles in their path. As I have said, our law already provides that there should be no discrimination in the provision of services that are essential to the formation of new businesses. In principle, therefore, I think that we would welcome a
  802
  European measure which made that guarantee of equal treatment in self-employment part of Community law. But I do not think that we could accept a measure which placed an increased and unnecessary burden on small firms and provided for the interference of the law in personal relationships.
  Mr. Tony Marlow: My hon. and learned Friend mentioned Community law. As most of us understand it, the European Community was established to enable free trade between the countries within Europe, which is a fairly sensible thing to do. Does it necessarily follow that we have to have the same legislation as other European countries with regard to men and women and equal opportunities? Are we not grown-up and mature enough to make our own decisions on the matter?
  Mr. Waddington: The Community brings forward draft directives, and the member Governments have to make up their mind as to whether the draft directives are justified in view of the terms of the treaty. After that, the member states have to come to a decision whether the proposals put forward by the Commission are reasonable. I have to tell my hon. Friend that this draft directive is currently under discussion by member states at official level. It is likely that it will be amended, possibly quite substantially, before it is submitted to the Council of Ministers for discussion.
  Mr. Marlow: I think that my hon. and learned Friend will feel like me, although I am not sure whether he would be prepared to say so. Were he to go round the pubs and working men's clubs and knock on doors in his constituency, and ask people whether this was an appropriate area for the Europeans to bring forward legislation, or whether it would be a more appropriate area for us to consider our own legislation, I think that the latter is the conclusion that he would get.
  Mr. Waddington: My hon. Friend has brought forth an important point. Perhaps he will speak on the matter later. I had better stick to the terms of the debate and put to the House the apparent purpose of the draft directives, and then the House can come to its own judgment on them. I think that I have stated the legal position correctly. We are talking only about draft directives. They are now under discussion by officials and eventually the Council of Ministers will have to come to a conclusion on whether to accept them.
  I had better move on to the draft directive on equal treatment in occupational social security schemes. The draft directive was issued by the European Commission as part of a continuing programme aimed at the elimination of the unequal treatment of men and women in the Community, and it is designed to bring clarity and, if possible, legal certainty to an area in which the application of equal treatment is often a matter of doubt for both workers and employers. It relates to occupational schemes providing benefits of a social security nature, for example, occupational sick pay schemes. But its main target, and the area where it would seem to have most application, is occupational pensions. Here it requires equality of treatment in access to scheme membership, in the conditions for reimbursement of contributions and the rights to deferred pensions, in the conditions for the grant of benefits and in the setting of levels of benefits and

  803
  contributions. The directive would also require equality of pension ages and benefits for surviving spouses, but permits the deferment of those provisions until equality in those respects is present in state social security schemes.
  Within the United Kingdom there is already legislation that gives a measure of equality to men and women in occupational pensions schemes. The Social Security Pensions Act 1975 provides for equal access to membership, and lays down conditions for the preservation of benefits which apply equally to men and women. But there remain significant differences in the treatment of men and women in relation to pension ages, and survivors' benefits, and actuarial factors are used that reflect differences in the morbidity, mortality or life expectancy of men and women. It is there that the provisions of the draft directive could be of major importance.
  In 1976 the Occupational Pensions Board produced its report on equal status for men and women in occupational pensions schemes. After detailed study, the board recommended that, because there is an obvious link between occupational and state schemes, when one comes to the fundamental issues of unequal pension ages and survivors' benefits, equality should not be enforced except in partnership with the state scheme.
  This view is also enshrined in the draft directive which permits deferment of the introduction of equal treatment in relation to pension age, and in relation to the provision of benefits for surviving spouses for so long as such differences exist in the state scheme. A provision allowing deferment is welcomed by the Government, provided that it covers all survivors benefits, and also other benefits and provisions which are linked directly to pension ages.
  As to actuarial data on the different life expectancy of men and women, the European Commission regards the use of such data as contrary to the principle of equal treatment if used to set different levels of benefit or contributions, but this approach has drawn almost total opposition from pensions practitioners and actuaries, not only within the United Kingdom but in other member states. It is argued, with some force, that actuaries take into account different factors in regard to ill-health, mortality or life expectancy, not simply by convention or through unjustifiable prejudice, but in order to establish the truth. The truth is that women generally live longer than men. Thus, even leaving aside any question of earlier retirement ages for women, their pensions are in payment for longer and, for a given level of benefit, are more expensive to provide. Unless these actuarial differences between men and women are disregarded, equal contributions for men and women provide lower benefits for women. Conversely, for women to receive equal benefits there have to be higher contributions.
  This is a very large and complex area and the Government are now in discussion with the Association of British Insurers and others, about the possibility of using unisex actuarial tables in some areas of pensions provision. No conclusions have yet been reached but in the context of the draft directive, it is not essential that they should have been. What is important is whether the directive as drafted is viable in relation to United Kingdom occupational schemes, and in the best interests of men and women in this country; and it seems to us that some changes are needed. First, the directive should not have the effect of prohibiting the proper use of statistical data. Secondly, the directive should apply compulsorily only to
  804
  periods of membership falling after the operative date of implementation, and those operating schemes should have a reasonable time in which to make the necessary changes to their rules.
  The cost involved in the changes will vary from scheme to scheme, depending on their present benefit structure, on the balance of men and women and the measures necessary to implement equal treatment. Since we already have equal access to pension schemes and most benefit-defined schemes provide the same scale of personal benefits to men and women, and since the directive would not require immediate equalisation of provisions for survivors or pension age, the likely costs of a directive modified as outlined in the explanatory memorandum would not be likely to be very great overall.
  In considering its response to the draft directive, the Government have consulted widely among those with a direct interest in the subject—those representing practitioners and scheme members. Many of the same bodies submitted evidence to the Select Committee on European Legislation. Inevitably there are differences of opinion, but the approach outlined by the Government in their explanatory memorandum commands considerable support.
  Since the issue of the memorandum in August 1983, discussions have been taking place in Brussels. It is apparent that a similar view of the deficiencies of the original draft directive is held by a majority of other member states, and that the approach adopted by the United Kingdom Government offers the best hope of securing agreement.
  Mr. Marlow: This is a complex issue and perhaps my hon. and learned Friend will be able to clarify it. Will he confirm that the draft directive applies not just to the provisions that Government will make but to provisions that the private sector pension schemes will make? If that is the case, will he also confirm that if at the moment men and women pay a certain amount for a pension, the whole lot will be thrown into the pot again and either men will have to pay relatively more or they will receive relatively less? Against the actuarial tables that he has been talking about, is not that profoundly unfair?
  Mr. Waddington: With respect, we are not dealing with Government pension schemes. The draft directive is on equal treatment in occupational social security schemes. I am sure that my hon. Friend will wish to develop his argument on that in due course, but I must make that plain.
  Lastly, let me deal with the second Community action programme on equal opportunities for women for the period 1986–1990, accompanying which was a draft Council resolution which, with some slight modifications, is likely to come before the Council shortly. It is a resolution which the Government would be very pleased to adopt.
  We are fully committed to equal opportunities in the labour market and support the general theme of the new action programme. We particularly welcome the attention to education and training policies which expand women's occupational choice and we have already taken many positive steps in the seven areas where the programme recommends action by member states.
  Under the first of these seven headings, "Improved Application of Existing Provisions", we can point to the Equal Opportunities Commission's excellent code of

  805
  practice on employment which came into force last year. Under the second heading, "Education and Training", we can, I believe, claim significant achievements.
  On education, Government policy is to continue to work for equal opportunities across all aspects of schools provision and to encourage girls towards higher achievements in those areas of the curriculum where they tend not to participate to their full advantage.
  One of the most exciting advances in education in recent years has been the development of school-industry links. One initiative being sponsored by the Government this year is the executive shadows scheme, which the Department of Trade and Industry is running with the Institute of Directors. That will involve a significant number of top business executives—about 750 have joined the scheme so far and we are hoping for many more—being "shadowed" for a week by sixth form students, both girls and boys. In that way they can learn a lot about the opportunities for women in business today.
  For older women, the Manpower Services Commission's full range of adult training programmes is open equally to men and women, and women are encouraged to consider non-traditional skills. In addition, the Commission has a small but valuable programme of special training for women. For example, there are some 2,000 places per year on the wider opportunities for women courses.
  The third heading of the action programme is "Employment". Here a variety of measures are suggested for member states, including a review of discriminatory legislation, the original purpose of which was protective. We have, in fact, already carried out such a review, as a result of which we have brought forward proposals in the Sex Discrimination Bill to repeal the unnecessary and outdated restrictions on women's hours of work which prevent women being employed in jobs based on shift work or night work.
  The programme also outlines the European Commission's continuing commitment to removing discrimination against women from member countries' tax systems. My right hon. Friend the Chancellor of the Exchequer has recently published a Green Paper on the reform of personal taxation which examines this and other issues. It looks closely at a system of independent taxation with transferable allowances which, in the words of the Green Paper,
  "would give married women the same opportunity for privacy and independence in tax matters as their husbands".
  The next matter referred to in the programme is headed "New Technologies" and the Government agree about the importance of increasing women's representation in occupations involving the new technologies. One of the MSC's priorities in the area of women's training is helping women to train for jobs in which there are actual or forecast skill shortages, and which are of key economic importance. That frequently means jobs involving new technology. The MSC also funds an Open University course for women returning to technological work after a spell away.
  The fifth action area in the programme concerns
  "social protection and social security".
  The Government support the principle of equal treatment for men and women in matters of social security as set out
  806
  in the 1979 social security directive and have reported to the European Commission on action taken to implement the directive.
  The sixth heading is
  "Sharing of Family and Occupational Responsibilities".
  We support some of the measures proposed under this heading, for example the encouragement of more flexible working hours and of part-time opportunities for either sex. Where we differ from the European Commission is in regard to the draft directive on parental leave and leave for family reasons. The Government cannot accept that an instrument so burdensome on employers and detrimental to job prospects would enhance equal opportunities.
  We recognise that many women—and many men—will want to combine family responsibilities with a career, but we believe employers and employees should be left free to agree between them the most suitable working arrangements for their own particular enterprise. Companies are already recognising the need to modify their traditional career patterns to recoup their investment in women. I commend the Engineering Council's report last year on career breaks. That demonstrated the importance of personnel policies that will attract the ablest young women into engineering and showed that many employers would be sympathetic to requests for longer than minimum maternity leave, reinstatement or nonstandard working arrangements.
  The communication refers to
  "Increasing Awareness and Changing Attitudes"
  and rightly stresses the importance of breaking down stereotyped images of men's work and women's work and their respective roles in society. There is much that I could say on that score, but I think that the House will agree that I have spoken long enough.
  As must be obvious from all the action already taken in this area and from the list that I gave of measures that are being taken, we do not accept the strictures of the Opposition, as expressed in their amendment. The amendment looks pretty silly when set against the number of Opposition Members who are present to support it. It is a silly and inaccurate amendment, because it refers to
  "obstruction of equal pay for work of equal value".
  This Government, unlike the previous Labour Government, have provided for equal pay for work of equal value. I do not know why those who drafted the amendment were silly enough to insert that phrase.
  10.23 pm
  Mr. Alfred Dubs: I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
  'approves the European Community Documents Nos. 6871/83, draft proposals for a Directive on the implementation of the principle of equal treatment of women and men in occupational social security schemes 5825/1/84, draft Directive on the application of the principle of equal treatment for women and men in self-employ occupations including agriculture and on protection during pregnancy and maternity, and 4118/86, communication from the Commission to the Council concerning a medium-term Community programme (1986/90) on equal opportunities for women; and deplores the Government's lack of commitment to the principle of equal treatment for women and men and equal opportunities for women, as demonstrated by its refusal to implement the directive on parental leave, its obstruction of equal pay for work of equal value, and its failure to extend invalid care allowance to married women.'.
  Listening to the Minister one would think that we lived in a perfect world where men and women were equal in all respects and there were no problems apart from the

  807
  occasional document from the EEC. The fact is that there is considerable inequality in this country between men and women in all aspects of life. The Minister knows that discrimination against women is widespread, and no amount of glossing over the truth will hide that fact.
  Mr. Waddington: The hon. Gentleman is entitled to make that remark, but I do not know what bearing it has on my speech. I was not discussing whether there is discrimination; of course there is some discrimination, but I was merely outlining the purpose of the Community documents.
  Mr. Dubs: The purpose of the documents is to tackle discrimination in many areas of life in this country. The Minister said that the Government agreed with occasional items in the documents, but were not happy with the general thrust of the documents. The Minister of State made that clear and the Government motion makes it clear, too. The Government ask the House to take note of these documents. They do not say that they approve of them. There is a world of difference between the two.
  It is not easy to tackle discrimination. There is no way in which one piece of legislation. no matter how large and wide-ranging, can deal with it. It takes years of effort and pressure slowly, item by item, to reduce discrimination, whether it is discrimination against women or discrimination against black people. The Government's record is not good. On one occasion after another, the Government have resisted the voice of common sense. They have not listened to those who have told them how to prevent discrimination.
  There has been a European Court ruling on the Government's attitude towards different retirement ages for men and women. The Government did the absolute minimum to comply with that ruling. The Government have also consistently refused to give the same invalid care allowance rights to women as to men.
  When I first looked at the EEC documents I thought that they represented real progress. Then I noted the wording of the Government's motion. They are reluctant even to approve these documents. That is the basis of this debate. If the Government had said that they welcomed these documents and that they would do their best to implement them—
  Mr. Marlow: The Government said that.
  Mr. Dubs: No, the Government did not say so. The Government have carped and found reasons for rejecting the bulk of the EEC documents. That is why the Opposition have tabled the amendment. The Minister knows that Britain has the worst record of any European country over complying with these types of directives.
  I regret that these are EEC initiatives. I should have preferred them to be British initiatives. I am not a particular fan of the Common Market and its many institutions, but when sensible initiatives are put forward I believe that it is better for this country to agree that they are sensible and to adopt them. That is better than carping, because of the source from which they come. That is the basis of some of our disagreements with Conservative Members who sit below the Gangway. If the Government were to produce their own initiatives, we should not have to pay regard to the EEC directives. However, there are no Government initiatives. Therefore, we have to examine the EEC directives.
  808
  I shall comment briefly on the three documents. First, I shall deal with the medium term programme. It is a wide and all-embracing programme that is designed to tackle discrimination under many headings during the next few years. Therefore the Minister should have been less lukewarm when he referred to it. Some of the recommendations are sensible and good and they are worth adopting.
  The Minister said that there is good integration between formal education and vocational guidance, and that there are good links between the workplace and school. I am not convinced by his argument. There are many areas where improvement is possible. We welcome the code of practice to which the Minister referred. However, it is the only new feature in this area that commends itself to the Opposition. It will make a major difference.
  The document also refers to the importance of having women in teaching posts at all levels. The Minister did not refer to this point. The document refers to the need to provide opportunities for women to take training courses and to the need to make such opportunities easier by additional provision for child minding. The document also refers to the need for improved information and to the need for public sector employers to set an example. That is very important, as public sector employers are directly under the Government's control.
  Some local authorities have shown useful initiatives on contract compliance. That is a means of bringing pressure to bear upon suppliers to the public sector. Contract compliance is a useful and important innovation, and I regret that the Government have not sought to adopt it. The Minister expressed support for it, but he was then told that this was not the direction in which the Government were going.
  The document also refers to improving the opportunities for women in decision nuking. I think that that is well worth while, although it also refers to the
  "opening up of political parties",
  and I wonder whether that is as much in the Government's power as the directive suggests.
  The document contains a useful suggestion about providing help for the disadvantaged, single parents and migrants—we would refer to members of the disadvantaged black community. It also refers to home workers. It contains a welcome suggestion about giving women greater opportunities in the new technologies.
  Some of us were on the bus in the Members' Car Park last Monday inspecting an exhibition sponsored jointly by the Equal Opportunities Commission and British Gas introducing a scheme—"Women into Science and Engineering." I found it interesting that schoolgirls were so enthusiastic about computers and other aspects of science. That is a welcome development. I do not see why science, technology and computer studies should he the prerogative of boys. Some of the girls on the bus carne from Wandsworth. They were full of enthusiasm and were determined not to allow boys to steal a march on them. That is an isolated initiative. I regret that there are not more.
  The document refers to sharing family and occupational responsibilities, to parental leave and to schemes to improve leave for family reasons. I regret that the Government consistently say that they will not adopt such sensible proposals. The Minister talked in generalities. He

  809
  said that the schemes were good but that the Government were against specific suggestions such as those on parental leave.
  I welcome the document on equal treatment for people in self-employed schemes. I understand what the Minister said about the problem of legal arrangements between spouses, but the document contains many other useful proposals. The EEC says that the Government would have full discretion to implement the proposals in the best way appropriate to national circumstances. The document breaks new ground and makes useful proposals which would improve women's lot.
  The occupational schemes initiative is worth while in terms of equal treatment for men and women when hit by
  810
  sickness, invalidity, old age, accident. occupational disease and unemployment. A number of clear suggestions are made about action which should not be acceptable if equal treatment is to be the norm.
  I regret the Government's attitude. I regret that the Government pay lip service to equal treatment for men and women. The Government say, "Yes. If it is easy we shall do it", but if there is any difficulty they capitulate and say no.
  The Minister made a sorry speech. The women of our country will be angry and will regret that the Government have turned their back on a number of useful initiatives. The women of our country will not accept that and it is time that the Government realised it.

  Equal Opportunities
  10.34 pm
  Mrs. Edwina Currie: I disagree with almost everything that the hon. Member for Battersea (Mr. Dubs) said. I welcome the Minister's wise words. One always worries in such debates that the Minister will have to kow-tow to spurious ideas of equality and that some of the dafter notions about how to achieve equality will be on their lips. I am glad that my hon. Friend the Minister is more robust than that.
  Tonight we are discussing three directives. I shall set aside the draft directive on equality in self-employment, because from what I have read of it we are already carrying out most of it—especially on equality of access to loans. The hon. Member for Battersea should know that, because it was his Government who passed that legislation some 11 years ago. In law and in practice, the bulk of the suggestions in the directive have been carried out in this country for a long time.
  I wish to concentrate on occupational pensions and on the overall Community action programme for equal opportunities for women. I note in passing that it proposes to spend 2·6 million ecu on the latter by the year 1990. I suspect that such groups as the late lamented GLC women's committee, which managed to spend £16 million before its demise, could show the Community a thing or two, yet it did not bring about a scrap of additional equality in this city.
  Mr. Marlow: My hon. Friend mentioned the late and unlamented GLC women's committee. As she has read and understands all the detail of the legislation, can she advise me whether it would be possible to have a women's committee without also having a men's committee?
  Mrs. Currie: I refer my hon. Friend to the Minister, who is not only fully briefed by his Department but is a learned member of the law and therefore better able than I to advise my hon. Friend.
  I wish especially to discuss pensions. Like most women Members, I take a close interest in my pension entitlement. I am statistically more likely to draw it than my male colleagues, and for far longer. Therefore, I take a close interest in pensions. My oldest constituent is a lady who will soon celebrate her 106th birthday. She has been drawing a pension for 70 years, and is taken to collect her pension by her son, who will be 87 this year. That is a fate that I suspect will befall a good number of the female members of our community, but precious few of the male members.
  Mr. Andrew Rowe (Mid-Kent): If the equality of opportunity to live the sort of stressful life that is commonplace among men is extended to women, does my hon. Friend believe that women will continue to enjoy this ext
  Mrs. Currie: Naturally and absolutely—it as been like that since Bible days and beyond, and it looks as though it will be like that for a few more millennia.
  The occupational pensions draft directive seeks completely to ignore the differences in demography between men and women. The European Commission considers that the use of statistics relating to ill-health or
  812
  life expectancy that differ for the two sexes is contrary to the principle of equal treatment if used to set different levels of benefit or contribution. Yet male and female mortality rates are different and women do live longer than men. One might as well try to abolish the real world.
  I call in evidence professor David Wilkie, research actuary at Standard Life Assurance in Edinburgh. Back in November 1983 he warned of
  "enormous difficulties in the crude implementation of a principle of equality. This was quite inappropriate for funded schemes."
  He was absolutely right.
  Mr. Harry Cohen: The hon. Lady referred to life expectancy being different, but the report from the Comission states:
  "differences in life expectancy are very clear-cut between categories of male workers, according to the occupation pursued. if account is not generally taken of them in calculations it is difficult to see why an exception should be made only in the ease of female workers."
  Does not the hon. Lady agree with that?
  Mrs. Currie: Perhaps the hon. Gentleman will wait until the last few words of my speech, when I shall take up some of his points.
  If women want equality of treatment, they must earn it. They are earning it substantially because more than 60 per cent. of women are working, and more than 70 per cent. of those of my generation are doing so. We now form over 41 per cent. of the work force, and the percentage is rising. We have been mightily successful in the new forms of employment that have become available in recent years as we seem to be taking the bulk of the new jobs.
  If women want equality of treatment, they must pay for it. They must earn it and pay for it, and that is where it gets harder. I suspect that many of my sisters are not willing to pay. Many of the women who are working now are paying little or no tax arid low-level or no national insurance contributions. By far the largest bulk of women currently drawing pensions are doing so on their husbands' contributions and not on their own. National insurance contribution law changed in the mid-1970s, but it will be many years before a full generation of women are drawing state pensions that are based entirely on their own contributions and not those of their husbands.
  My hon. and learned Friend the Minister of State mentioned the Green Paper on personal taxation, which proposes transferable allowances. That was widely welcomed, but one of the implications for the 2 million women who are currently paying no tax on their earnings is that they will have to do so in future. They will not like that, and they will not thank my hon. and learned Friend or any of my colleagues for the equality that they are buying.
  Many of the calls by women for equality of treatment ignore the whole question of paying for it. It is part of the general malaise of the British people that we all want the services but think that there is a special tree growing in No. 10 Downing street that has little golden apples on it that will allow someone else to pay.
  Mr. Frank Field: The hon. Lady is presenting a picture of women not wanting to pay. Is she aware that, because the Government are putting such emphasis on increasing part-time jobs, with most of them going to women, most women do not earn enough to be called upon to pay contributions?
  Mrs. Currie: The hon. Gentleman has put my argument in a slightly different way. If and when the time comes and the rules are changed and women are required to pay tax and national insurance contributions, every Member of this place will have a postbag full of letters from women saying, "If this is equality, I do not want it." I look forward to the day when they will say, "We want this and we are prepared to pay for it."
  Mr. Field: That will occur only when women have the chance to obtain full-time jobs.
  Mrs. Currie: They do have the chance. We all have the chance. These opportunities are taken up.
  If we want equality, it will cost us. If we believe in equality, we should be willing to pay. If we are not the bulk of the work force but we are the bulk of dependants, we must accept inequality, which cheerfully and wickedly works in our favour—in other words, it is the men who are paying—or start digging deeper into our handbags. That is a reality that we must begin to face. Whatever the Common Market says, the demography will not go away, and neither will the inexorable logic that that imposes.
  We see exactly the same double-think in employment protection. We have heard about the sex discrimination Bill that is to be introduced this year, which will remove the protection that prevents women from working at night and in certain occupations. Women in my constituency have told me, especially those who are breadwinners, that they welcome the proposed change. They would like to see the restrictions removed, but self-appointed women's groups are talking about women being at risk and how dangerous and difficult it will be if women have to work at night or undertake the sort of dreadful work that some men have to do. There are howls of rage on those grounds.
  It seems that my hon. and learned Friend the Minister is on a hiding to nothing, but I wish him well. I should like to see the present restrictions removed and to see competent people, whether male or female, take their place in the job market as they will, wherever possible. I support him on that, but I warn him that he will find himself up against the women's groups, which are all so keen to have the directive on equality which is causing the changes to be brought about.
  I long for a world in which we no long see the words "man" and "woman" in every piece of legislation that is written. I would prefer a world in which we see people—collections of individuals—with their own ambitions and abilities. Each person should be encouraged—I agree with some of what has been said this evening—to make his or her best efforts and the best contribution that he or she can make to our society. I want a world in which family responsibilities are taken seriously by all the members of the family, preferably before the family actually arrives, and in which those responsibilities are shared not in an artificial way, not in the way that is set out in the directive, but according to the tastes, abilities and interests of all concerned. That is the true path to equality of recognition and equality of achievement for women in Europe, and I commend it to the House.
  10.44 pm
  Mrs. Ann Clwyd: In the two years that I have been a Member of this House there have been few debates on equality between men and women, and they have always been greeted with ridicule by Conservative
  814
  Members. This is a serious subject that ought to be debated properly. I remember my hon. Friend the Member for Barking (Ms. Richardson) speaking about parental leave. Her speech was rubbished throughout by Conservative Members who refused to give her a fair hearing. I hope that we have some semblance of a decent debate today. If hon. Members have nothing better to do than ridicule and make fun of serious proposals, they should leave now.
  The Government's attitude to equality between the sexes is clear from their being prepared only to take note of the various Community documents. The Government have almost always had to be prompted by legal action in the Community even to begin to amend the sex discrimination and equal pay legislation, which was progressive in its time, but which have loopholes that have been described time and again. The Government are dragging their feet on the Sex Discrimination Bill in the other place. Discussions in the Community on further directives or legislation to promote equality will obviously not be treated seriously.
  In 1981, the Equal Opportunities Commission recommended 25 amendments to the Sex Discrimination Act 1975. The Government have accepted only three. That shows how seriously they take the subject. They have accepted the equal pay recommendation, which is to widen the definition of equal pay on which a claim can be based. The Government are also accepting the reference to collective agreements and the reference to include small firms and undertakings.
  Anyone who has followed what has happened in the European Court of Justice can only be ashamed by the attitude of Britain, which is depicted by Conservative Members who do not understand what proposals are being made, cannot be bothered to listen to the arguments and have never taken the subject seriously while they have been in the House.
  Those who have experience of being in the European Parliament can only feel ashamed that Britain has appeared before the European Court of Justice on sex discrimination issues more than any other EC country. I do not know how the Minister expects to be believed when he says that the Government are full of good intentions, bearing in mind the Government's refusal since 1979 to tighten loopholes in the sex discrimination and equal pay legislation.
  Miss Helen Marshall, the retired dietician, is the most recent in a long line of women who have caused the European Court of Justice to pronounce Britain's equality laws as leaving women far from equal with men. She fought for six years against her enforced retirement at an earlier age than if she had been a man doing the same job in the National Health Service. The Government have acted with some speed to implement that particular ruling against the compulsory retirement of women at the age of 60, but it is a pity that they did not see fit to rectify the anomaly until ordered to do so by a court outside the United Kingdom. When the Sex Discrimination Bill is suitably amended, probably this summer, women will have the legal right to stay at work until they are 65.
  That is a far cry from the early 1970s, when Britain seemed to be at the forefront of those giving women more equal status, particularly at work. The key legislation was the Equal Pay Act 1970 and the Sex Discrimination Act 1975—both infants of a Labour Government. The European Commission has taken a much more genuinely equal view of women's status through a series of directives which the Government have repeatedly refused to

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  implement. Britain has been one of the states most prone to drag its feet to obey them. A series of defeats at the European Court of Justice has torn both those Acts asunder, leaving Britain with a poor image on equality.
  It is worth looking briefly at some of the background. Article 119 of the Treaty of Rome states that men and women should receive equal pay for equal work. Pay is defined as the ordinary basic or minimum wage or salary and any other consideration in cash or kind which the worker receives from the employer. The Council of Ministers has also adopted three directives on sex equality at work. The 1975 equal pay directive sets the principle of equal pay for equal work. The 1976 equal pay treatment directive aims to overcome sex discrimination in the hiring of staff, in vocational training, and in promotion and working conditions. It also forbids sex discrimination, particularly in connection with marital or family status. That directive was breached by Miss Marshall's enforced retirement at a younger age than a man.
  The 1979 social security directive forbids discrimination over contributions or entitlements to social security and benefit schemes. The British Equal Opportunities Commission and the European Court have highlighted time after time Britain's failure to treat women equally, although many other EEC states have also been found dragging their feet.
  I shall not go through all the incidents in which the United Kingdom has been dragged before the European Court of Justice, but the court ruled against Britain in 1982. As a result. Britain had to amend the Equal Pay Act. Since 1 January 1984 women have been entitled to equal pay for work of equal value. Contrary to what the hon. Member for Derbyshire, South (Mrs. Currie) seems to believe—I suggest she looks at the new earnings survey 1984—women were still earning less than men in 1984 in a range of occupations, including those where the concept of equal value is easy to assess. Recently, the EC backed a test case where a cook from Cammell Laird claimed her training and work was of equal value to that of other craftsmen in the company. That case will be dealt with shortly. If that cook wins, the Equal Pay Act will be redundant in all but name. Women will once again have scored a victory, with enormous cost implications for private and public sector employees.
  Mrs. Currie: I should be grateful if the hon. Lady would explain how insisting on higher pay for women will aid the promotion of employment for women. Will it not result in many of those good ladies losing their jobs because their employers cannot afford to keep them on?
  Mrs. Clwyd: The hon. Lady has missed the whole point. I was arguing not for higher pay for women but for equal pay for women doing equal work. If she had looked at the new earnings survey, she would have seen that women's earnings as a percentage of men's earnings in a whole range of occupations are much lower. That is the point. We want equal pay for equal work. I was not arguing for higher earnings.
  Mr. Cohen: The hon. Member for Derbyshire, South (Mrs. Currie) implied that higher pay meant job losses. But does not the privatisation of, say, hospital cleaning mean lower pay and fewer jobs?
  Mrs. Clwyd: I thank my hon. Friend for that intervention. The information from Conservative Central
  816
  Office is obviously not as good as the Labour party's information, which is contained in "Women, Low Pay and Employment Protection". If Conservative Members want to know the facts about low pay and the employment of women, they should look at a copy of that document. They might find it very useful, and discover what low pay is all about.
  The policies of the European Commission can be effective only if national Governments have the will to implement them. I believe that organisations and individuals have a role in putting pressure on their Governments. The United Kingdom Government are the only Government, of course, planning to exercise a general veto on the parental leave measure. [Interruption.] Nine other EC countries have already introduced various forms of parental leave. Thus, once again, this country is dragging its feet. I hope that those women who listen to the debate or who read about it tomorrow will write to some of the reactionary Conservative Members present and spell out their views on this important issue.
  Nowhere are these European Community policies needed more than in the United Kingdom. Three important directives are returning to the Council of Ministers for ratification in June. All three have been blocked by the United Kingdom Government in the past.
  Mr. Nicholas Budgen: Well, they have done something right, anyway.
  Mrs. Clwyd: It is interesting to hear Conservative Members say how much they approve of blocking measures for equal treatment for men and women—[Interruption.] I hope that their constituents are listening. The first directive proposes equal treatment for men and women in occupational security schemes. The second introduces protection for self-employed women during pregnancy and motherhood, and the third covers parental leave. No doubt the Government will again be dragged screaming and kicking in front of the European Court of Justice for failing to implement EC directives when they become law. If the hon. Member for Derbyshire, South has read the new report of the Equal Opportunities Commission, which clearly showed the amount of sex discrimination in recruitment, she cannot possibly believe the arguments that she put forward. That report found that most employers still saw jobs in terms of men's or women's work. They specifically seek women to fill the jobs offering lower pay, and poor promotion prospects.
  The report said that employers neither understood nor were they concerned with upholding the sex discrimination legislation. The research took 10 years. It was very thorough. I do not think that even Conservative Members would dispute the findings. For almost half the vacant jobs, the employer already had in mind the sex of the person to fill the post, even though 86 per cent. of the jobs attracted applicants of both sexes. Discrimination occurred between men and women according to the characteristics of the jobs. Employers preferred women for the jobs with lower pay, fewer promotion prospects and where work colleagues and supervisors were female.
  Let us not argue for one moment that women receive equal treatment. That is simply not true in terms of pay, social security and a range of provisions. I wish that Conservative Members would try, for once, to conduct a reasonable debate on this important issue. I am sure that women electors in their constituencies will show their

  817
  disdain for the way in which they treat problems that affect those women, and their disdain for the way in which they treat them in the House. I think that it is disgraceful, and Conservative Members should be ashamed of themselves.
  11.1 pm
  Mr. Charles Kennedy: I endorse many of the thoughtful and correct comments of hon. Members whatever their party. [Interruption.] I think that we would agree that it is rather sad that the public school boy hooligans are out in force tonight.
  Dr. Norman A. Godman: They are not public school boys. They are a poorly educated lot.
  Mr. Kennedy: I agree with the hon. Gentleman. It may be an unfair reflection on public schools. [Interruption.] If Conservative Members will allow me to to do so, I shall endorse many of the points and thoughts that the hon. Member for Cynon Valley (Mrs. Clwyd) put forward.
  Mr. Budgen: Has the hon. Gentleman heard the arguments before?
  Mr. Kennedy: I noticed that the hon. Gentleman breezed in half way through the debate. I hardly think that he is in a position to make such a comment. The hon. Member for Cynon Valley made a lengthy speech. I shall be curtailed from doing so because the hon. Member for Northampton, North (Mr. Marlow) wishes to contribute before the winding-up speeches begin. I think that we should conclude on a high note of levity.
  The hon. Member for Derbyshire, South (Mrs. Currie) put forward her view of the legislation. She told us that it was up to society to treat people as people and that such legislation was not necessarily helpful. It is worth remembering that the hon. Members for Cynon Valley and for Derbyshire, South, are in this institution, very much the exception rather than the rule in terms of their sex and their membership of the House. In considering in detail, as the documents do, the need to change not only attitudes but Government policies to provide fairer treatment and opportunities for men and women, we need look no further than the House of Commons, which is one of the most drastically unrepresentative institutions in western Europe. [Interruption.] Conservative Members should remember that, earlier this week, the alliance was delighted to welcome a lady into the House of Commons as one of our Members of Parliament.
  I endorse the view that the Minister's opening speech was somewhat disappointing. The Government have given a lukewarm response to the draft directives. It is strange that the remaining bastions of liberal thought, as they affect legislation in this country, are invariably the House of Lords, the High Court and European legislation or directives. Little innovative or progressive work in these matters is initiated in the House of Commons by the Government. Time and again we find ourselves at this hour of the night debating draft directives and alterations to statutory instruments which are the result of external pressure on the Government, not a positive desire by the Government to promote policies on sex discrimination which should have broad support and in which Parliament should show the lead. This is a matter for all parties, not one party or one side of the House.
  818
  The Government's reluctance to give these documents the wholehearted approval which they should have is very much related to the point made by the pensions industry on the implications of equal treatment on existing United Kingdom legislation. The Government may take cognisance of the views of the pension industry and reflect its concerns about the possible effects of these directives if enacted in Britain. However, I wish that they had been willing to give so much attention to that industry's views when they reformed the state earnings-related pensions scheme. If the Government were a little more consistent and less selective in listening to and ignoring the views of financial institutions, they might have had slightly more credibility in advancing this argument. The Government's response is disappointing. We cannot and will not support it.
  We accept that, in taking a rational look at the horrendous long-term costs of pension provision, there cannot be overnight reform. No one suggests that there can be. The Minister rightly emphasised that point. If we want the principle of equality of treatment, as opposed to equality of access which we have under existing legislation, and want greater sexual equality through our institutions and our legislation, we must start to be more committed and wholehearted and stop waiting for Europe, the courts or the House of Lords to tell us how to make our decisions.
  Until we have a House of Commons that reflects more accurately the breakdown of society into two sectors, it is highly unlikely that we shall have a Government who are as committed as they should be. Until that day comes, I doubt that this Government will bring forward the type of legislation that we want. On that basis, the Goverment's response is inadequate and disappointing, and we shall not support it.
  11.8 pm
  Mr. Tony Marlow: When I first became a Member, I may have been a little naive and a little simple—[Interruption.] I thought that that would get them going, Mr. Deputy Speaker. I believed that Governments could decide and choose what legislation they wanted to bring forward. I did not realise the extent to which outside lobbies, bodies and foreign institutions were able to bully, cajole and press Governments into bringing forward the sort of nonsense that we are considering. As a member of a Conservative governing party which was elected on the platform of less law, I am appalled that this sort of nonsense has been brought before us tonight. If I had brought a random sample of my constituents here to watch our proceedings and they had seen that we were discussing this issue, not because we in the United Kingdom wanted to discuss it, but because we had been told by Europeans to do so, they would have been appalled and amazed.
  Europe is about trade and co-operation. It is not about Socialism. It is not about imposing complex legislation of a pan-European nature on social issues. I understand that day by day, week by week and month by month, the Labour party is becoming more enamoured of the European Community. We understand why; because of the bureaucracy there and because of the ability to espouse Socialism and force Socialism on this country from the institutions on the other side of the Channel.
  We heard a lot from the hon. Member for Cynon Valley (Mrs. Clwyd) about the European courts, and she is

  819
  ashamed that we are made to take measures because of the European Court. I will tell the hon. Lady, as the vast majority of my constituents would tell her, that we could not give a fig for European courts. We are legislatively mature enough and long enough in the tooth to decide on our own social policy, our own measures and our own laws, and it is only right that we should make our own laws without having advice and influence from overseas.
  The hon. Lady, who took about 20 minutes of the House's time, was going on about discrimination against women. What about discrimination against men? When men get the pension at the same age as women, I will pay a little more attention to what the hon. Lady says. When we act fairly towards men who suffer divorce and whose ex-wives, who are in receipt of finance from them, go and live with other men and still get the full divorce settlement from their husbands, although their husbands have other children to look after, then I will listen to the hon. Lady. If we are to have no discrimination—it is not possible, because men and women are different and long may it remain so—let us have no discrimination in both directions.
  We believe in the market in this party, and we believe in the private sector. The private sector provides pensions, just like the private sector provides insurance. If someone insures a sports car, he pays more because the chances are that he is more likely to have an accident. If he has a red car, he pays more for the insurance, because he has been assessed as being more likely to have an accident. Women live longer than men. If women are to get a better deal on pensions, and there is only a certain amount of money available, it means that men will get a less good deal. That is unfair to men.
  It is nonsense. It is against the interests of this country. We will make up our own minds.
  11.12 pm
  Ms. Jo Richardson: The speech of the hon. Member for Northampton. North (Mr. Marlow) was no laughing matter. I wonder where the Conservatives of Northampton, North found the hon. Gentleman. I wonder, too, why, when there is any possibility—there are few—of a debate in the House on equality, it brings out the chauvinistic, not to say sexist, bores in the Conservative party. I hope that television cameras will come into the House soon, so that the behaviour of hon. Members on the Bench below the Gangway will be seen by their constituents. They would not remain here for much longer.
  This is a serious matter and I make no apology for taking it seriously, as the Government took it seriously in tabling the motion. It seeks support from the House for the Government's singular failure to implement the Community's first action programme, which began at the end of December last year. Moreover, by endorsing the Government's record and approach to equal treatment, the motion seeks to congratulate a Government who have played a prime role in blocking arid obstructing progress and agreement in this area in Europe, and who have obstinately deferred and unnecessarily complicated all practical, progressive measures that have been forced on them by the European courts.
  The Minister of State, Home Office, ridiculed us for including
  "equal pay for work of equal value"
  in our motion. We did that deliberately. That concept was introduced after the Government had been dragged
  820
  through the European Court and were brought kicking and squealing into this Chamber not wanting to introduce it at all. The Government introduced it in such a complicated and obstructive form that it is almost impossible for women to take claims before the court.
  It is important that we support the call for approval and implementation of the directives. If we do not, we cannot be sure that the Government will support the medium-term Community programme for 1986–90. The Government have done hardly anything, in spite of what the Minister said, in the programme for 1982–85. In the introduction of the medium-term programme the Commission noted that the programme can be realised only if it is supported by the "political will" of all the parties, particularly the member states. I have no love for the European Community and I agree with those, including the hon. Member for Northampton, North, who say that we should introduce our own legislation. However, we are not introducing our own legislation. Therefore, we have no other option but to try to bring to the attention of the House the legislation going through other parliaments.
  The Government do not have the political will. If they did they would have set out approval of the documents in their motion. Among the 16 actions set out in the 1982–85 programme, the Commission has stressed the importance of adopting the draft directives based on them as a demonstration of that political will and commitment. We all know that the directive on parental leave was emasculated by the Council of Ministers before it ever came to us and, to the eternal shame of the Conservative Benches, it was rejected by the House in November 1985. Not only have the Government refused to adopt the diluted proposals for parental leave, but they have actively withdrawn support for child care and other services for adult or handicapped dependants by restricting local authority and health authority spending.
  The other two directives we are asked to underline tonight have already been mentioned. One is about helping the problems of farmers' wives. In my view, that directive does not go far enough, because the families of farmers as well as their wives do much unpaid labour and that should be taken into account. The Commission also calls for the implementation of the directive drawn from action 4, the aim of which was to achieve equal treatment in ocupational social security schemes.
  It has not gone unnoticed that the Government have seen fit to point out that equal treatment does not preclude reducing benefits for one sex rather than increasing them for another. The Tory Administration has been an abysmal failure in this policy area. One has only to look at the so-called Fowler review of social security—heralded as the most comprehensive review since Beveridge—the European ruling on the Marshall case, referred to by my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) and at the Advocate General's guidance on the extension of invalid care allowance for married and cohabiting women.
  The Government have disregarded not only the views of the European Commission but the views of their own Equal Opportunities Commission, as well as the views of many distinguished women's groups and organisations throughout the country and in Europe. They have in4isted upon retaining and consolidating the breadwinner concept and aggregation, which constitute and perpetuate indirect discrimination against women.

  821
  Similarly, the Commission's proposal on action point 8, to end discrimination against pregnant women, has been flagrantly flouted by the Government. They have launched an unprecedented attack on all maternity benefits, through the Fowler review and their proposals for so-called reform of statutory maternity allowance.
  Strangely, although perhaps not really so strangely, coming from this Government, who have so consistently used equality as a mask for worsening the conditions of women and men—we have only to look at the ill-fated Shops Bill and the Wages Bill—the Government have grasped only one of the action points, and are seeking to abolish protective legislation in the Sex Discrimination Bill, which has been through the House of Lords and is coming to the House shortly. That will worsen the position of women.
  It is not surprising that the Government seek to ignore the Commission's better recommendations by merely noting them. They expose the only real strategy that the Government have in relation to women. It is, under the guise of economic necessity, to block all advance and, wherever possible, to undermine existing achievements. I cannot put it better than a paragraph of the 12th report of the Select Committee on European Legislation, on 26 February 1986, which states that the Government
  "conclude that any further legislative burdens on employers must be considered in the light of their likely detrimental effect on job creation and hence on equal opportunities, and consequently will seek to ensure that any resolution adopted by the Council contains no unacceptable commitments as to further directives."
  In other words, the Government, in the name of lifting so-called burdens from employers, blame equal opportunities for their failure to tackle unemployment. In short, they are making women pay for the failure of their economic policies; it is that economic, social and political fact that our amendment seeks to expose. I invite my right hon. and hon. Friends to support me in the Lobby against the Government.
  11.22 pm
  The Parliamentary Under-Secretary of State for Employment (Mr. Ian Lang): The debate has ranged wider than the three European Community proposals concerning equal opportunities and equal treatment for men and women. Even the three proposals cover the responsibilities of at least three different Government Departments, but I shall try to answer as many of the points that have been raised as I can in the time that remains.
  I should like to begin by reaffirming the Government's commitment, as the hon. Member for Battersea (Mr. Dubs) seems to be in some doubt, both to the principle of equal opportunities and equal treatment for men and women, and to action to help make it a reality. Of course, there is a long way to go, but we have already passed some milestones. Today there are nearly 11 million women economically active in Great Britain, making up some 40 per cent. of the labour force. The United Kingdom has the second highest female labour force participation rate in the European Community after Denmark, with about 60 per cent. of women of working age economically active, as my hon. Friend the Member for Derbyshire, South (Mrs. Currie) said in an excellent speech.
  The United Kingdom accounted for more than half the Community's total female employment growth between
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  1983 and 1984. The number of women in full-time jobs rose by 17,000 in the year to September 1985, and the number in part-time jobs by nearly 180,000.
  I think that all hon. Members recognise the Government's achievements in the sphere of training, particularly youth training. The youth training scheme is particularly significant for girls, who have obtained only a tiny share of traditional apprenticeships. In the one-year scheme, for example, 80 per cent. of all young women on the scheme were in employer-led provision, gaining direct experience of industry and commerce. In two-year YTS, with its increased vocational focus, all young people will have the opportunity to acquire a vocational qualification or a credit towards one. That will revolutionise the opportunities which 16-year-old girls leaving school have until now had to obtain such qualifications.
  Last December, the Youth Training Board endorsed a package of measures designed to challenge sex-stereotyping in YTS and further encourage girls to consider training opportunities in occupations in which they are under-represented. The package includes encouraging providers to set up single-sex schemes in occupational areas not traditional to women.
  The Manpower Services Commission is also promoting equality of opportunity in vocational training in a number of other ways. For example, it is currently involved in the programme of "Women's Training Roadshows" touring the country under the auspices of the Women's National Commission. The roadshows are exhibitions aimed at encouraging girls and women to consider careers not traditionally associated with their sex, particularly science and technology-related careers.
  The hon. Member for Battersea referred to the bus that set off from Westminster on Monday. I helped to send that bus off under the auspices of the WISE scheme—women into science and engineering. There is also a scheme known as WOW intended to give wider opportunities for women. The Government are also bringing forward the Sex Discrimination Bill which will shortly come to the House for Second Reading. We have also, of course, supported the Equal Opportunities Commission's code of practice of 1985.
  The hon. Member for Cynon Valley (Mrs. Clwyd) referred to women's pay and complained that insufficient progress was being made towards equalisation of pay rates. She might like to know that average weekly earnings for full-time adult employees since 1979 have risen by 93 per cent. for men and for women by 99 per cent. There is a divergence of 6 per cent. at a time when the inflation rate rose by some 75 per cent.
  The hon. Member for Cynon Valley also referred to the Helen Marshall case. Of course, if the Social Security Pensions Act 1975, brought in by a Labour Government, had provided for equality in retirement, Miss Marshall would never have had to resort to the European Court.
  Mrs. Clwyd: This is 1986. Where has the Minister been in the meantime?
  Mr. Lang: The hon. Lady also referred to the United Kingdom blocking the occupational pensions directive. I must tell the hon. Lady that we are not blocking that directive. The approach adopted by the Government, and outlined in their explanatory memorandum, commands considerable support among other member states. It offers the best hope of securing a directive. Also, we are not

  823
  blocking the directive on the self-employed. There is certainly disagreement over some of the provisions that it contains from a number of countries, but we hope that a suitable draft can be achieved. We are simply trying to amend those aspects which are unworkable.
  Special training for women is being offered by an increasing number of institutions which my colleagues and I have designated under section 47 of the Sex Discrimination Act 1975 which allows training to be restricted to one sex only where it is for work in which members of that sex are seriously under-represented or where the trainees have been out of the labour market for some time discharging domestic or family responsibilities. To date, some 150 bodies have received such designation—all but one of them since the Government came to power. In 1985, the United Kingdom topped the European league for women's training, with 92 projects obtaining social fund money. Second came Italy with 13 projects.
  With regard to the parental leave directive, to which the Opposition"s amendment referred, of course the Government recognise that domestic responsibilities are a constraint on pursuing a career for many women, at least for a time. But reconciling child care with employment is not a problem to which there is a single solution suitable to be imposed by legislation. Indeed, there are a number of possible solutions, and parental leave itself is only a temporary and partial one.
  The Opposition amendment also referred to the equal pay for work of equal value directive, to which the hon. Member for Barking (Ms. Richardson) also referred. I cannot understand what the Opposition mean in the amendment when they draw attention to the Government's obstruction to equal pay for work of equal value. The Government amended the Equal Pay Act 1970 in 1983 to provide for equal pay for work of equal value following the judgment of the European Court of Justice. The original Act, which was introduced by the Labour Government, did not fully implement European law on that matter. I stress that the Opposition did not choose to include the concept of equal value in the Act that they introduced in 1970.
  The Opposition are in no position to criticise the Government. The same story applies if we consider the invalid care allowance. That is currently the subject of a reference to the European Court of Justice to ascertain whether the EEC directive on equal treatment in social security matters applies to that allowance.
  We have not yet received the court's judgment—it is expected next month—but the Government have made their position quite clear. We have a good record in complying with the directive and in removing discrimination from schemes—discrimination which was often introduced by the previous Labour Government, as was the exclusion of married women from the invalid care allowance. We have often gone further than the strict terms of the directive.
  Equal treatment for men and women in occupational pensions is a principle which few would argue against. There can be as little justification for inequality here as in any other area of economic activity where men and women work side by side, but there is a basic problem in applying the principle of equal treatment to occupational pensions. It is to decide what "equality" means. There is no shortage of opinion and assertion on the question; some of it is informed and some of it is expert, but, regrettably, much of it is neither.
  824
  Our approach to the discussions that have taken place—
  It being half-past Eleven o'clock, Mr. Deputy Speaker put the Question, pursuant to Standing Order No. 3 (Exempted Business), That the amendment be made.—
  The House divided: Ayes 82, Noes 157.

  Division No. 180]

  [11.30 pm

  AYES

  Atkinson, N. (Tottenham)

  Kennedy, Charles

  Barron, Kevin

  Kinnock, Rt Hon Neil

  Beckett, Mrs Margaret

  Kirkwood, Archy

  Bermingham, Gerald

  Lewis, Terence (Worsley)

  Boyes, Roland

  Lloyd, Tony (Stretford)

  Bray, Dr Jeremy

  McDonald, Dr Oonagh

  Brown, Gordon (D'f'mline E)

  McKay, Allen (Penistone)

  Brown, N. (N'c'tle-u-Tyne E)

  McKelvey, William

  Callaghan, Jim (Heyw'd & M)

  McNamara, Kevin

  Campbell-Savours, Dale

  Madden, Max

  Canavan, Dennis

  Martin, Michael

  Clay, Robert

  Maxton, John

  Clelland, David Gordon

  Maynard, Miss Joan

  Clwyd, Mrs Ann

  Michie, William

  Cocks, Rt Hon M. (Bristol S)

  Miller, Dr M. S, (E Kilbride)

  Cohen, Harry

  Morris, Rt Hon A. (W'shawe)

  Cook, Frank (Stockton North)

  Nellist, David

  Corbyn, Jeremy

  O'Neill, Martin

  Craigen, J. M.

  Parry, Robert

  Cunliffe, Lawrence

  Patchett, Terry

  Dalyell, Tam

  Pike, Peter

  Davis, Terry (B'ham, H'ge H'l)

  Prescott, John

  Deakins, Eric

  Raynsford, Nick

  Dewar, Donald

  Redmond, Martin

  Dixon, Donald

  Richardson, Ms Jo

  Dobson, Frank

  Robertson, George

  Dormand, Jack

  Rogers, Allan

  Dubs, Alfred

  Ross, Ernest (Dundee W)

  Dunwoody, Hon Mrs G.

  Rowlands, Ted

  Eadie, Alex

  Short, Ms Clare (Ladywood)

  Eastham, Ken

  Short, Mrs (W'hampt'n NE)

  Evans, John (St. Helens N)

  Skinner, Dennis

  Ewing, Harry

  Snape, Peter

  Faulds, Andrew

  Steel, Rt Hon David

  Fisher, Mark

  Strang, Gavin

  Flannery, Martin

  Straw, Jack

  Foster, Derek

  Thomas, Dr R. (Carmarthen)

  Foulkes, George

  Wallace, James

  Godman, Dr Norman

  Welsh, Michael

  Harrison, Rt Hon Walter

  Haynes, Frank

  Tellers for the Ayes:

  Heffer, Eric S.

  Mr. Ray Powell and Mr. Chris Smith.

  Hogg, N. (C'nauld & Kilsyth)

  NOES

  Alexander, Richard

  Brooke, Hon Peter

  Amess, David

  Brown, M. (Brigg & Cl'thpes)

  Ashby, David

  Bruinvels, Peter

  Aspinwall, Jack

  Buck, Sir Antony

  Atkins, Rt Hon Sir H.

  Budgen, Nick

  Atkins, Robert (South Ribble)

  Bulmer, Esmond

  Atkinson, David (B'm'th E)

  Burt, Alistair

  Baldry, Tony

  Butterfill, John

  Batiste, Spencer

  Carlisle, John (Luton N)

  Bellingham, Henry

  Carttiss, Michael

  Benyon, William

  Cash, William

  Bevan, David Gilroy

  Chalker, Mrs Lynda

  Biffen, Rt Hon John

  Chope, Christopher

  Biggs-Davison, Sir John

  Clarke, Rt Hon K. (Rushcliffe)

  Blackburn, John

  Colvin, Michael

  Blaker, Rt Hon Sir Peter

  Conway, Derek

  Boscawen, Hon Robert

  Coombs, Simon

  Bottomley, Peter

  Cope, John

  Bottomley, Mrs Virginia

  Couchman, James

  Bowden, A. (Brighton K'to'n)

  Cranborne, Viscount

  Braine, Rt Hon Sir Bernard

  Currie, Mrs Edwina

  Brandon-Bravo, Martin

  Dorrell, Stephen

  Bright, Graham

  Dover, Den

  Brinton, Tim

  Durant, Tony

  825

  Eggar, Tim

  Lang, Ian

  Eyre, Sir Reginald

  Latham, Michael

  Fallon, Michael

  Lawler, Geoffrey

  Finsberg, Sir Geoffrey

  Leigh, Edward (Gainsbor'gh)

  Forman, Nigel

  Lennox-Boyd, Hon Mark

  Forth, Eric

  Lester, Jim

  Fox, Marcus

  Lilley, Peter

  Gale, Roger

  Lloyd, Peter (Fareham)

  Galley, Roy

  Maclean, David John

  Garel-Jones, Tristan

  McLoughlin, Patrick

  Goodhart, Sir Philip

  Major, John

  Gow, Ian

  Marlow, Antony

  Gower, Sir Raymond

  Merchant, Piers

  Gregory, Conal

  Meyer, Sir Anthony

  Griffiths, Peter (Portsm'th N)

  Miller, Hal (B'grove)

  Ground, Patrick

  Miscampbell, Norman

  Hamilton, Hon A. (Epsom)

  Osborn, Sir John

  Hamilton, Neil (Tatton)

  Ottaway, Richard

  Hampson, Dr Keith

  Porter, Barry

  Harris, David

  Portillo, Michael

  Harvey, Robert

  Powell, William (Corby)

  Hawkins, C. (High Peak)

  Powley, John

  Hawkins, Sir Paul (N'folk SW)

  Rathbone, Tim

  Hayes, J.

  Rhodes James, Robert

  Hayhoe, Rt Hon Barney

  Rhys Williams, Sir Brandon

  Heathcoat-Amory, David

  Ridley, Rt Hon Nicholas

  Hickmet, Richard

  Robinson, Mark (N'port W)

  Hind, Kenneth

  Roe, Mrs Marion

  Holt, Richard

  Rowe, Andrew

  Howarth, Alan (Stratf'd-on-A)

  Sackville, Hon Thomas

  Howarth, Gerald (Cannock)

  Sainsbury, Hon Timothy

  Howell, Ralph (Norfolk, N)

  Sayeed, Jonathan

  Hubbard-Miles, Peter

  Shaw, Sir Michael (Scarb')

  Hunt, David (Wirral W)

  Shepherd, Colin (Hereford)

  Hurd, Rt Hon Douglas

  Smith, Tim (Beaconsfield)

  Jackson, Robert

  Soames, Hon Nicholas

  Jenkin, Rt Hon Patrick

  Speller, Tony

  Jones, Gwilym (Cardiff N)

  Spencer, Derek

  Jones, Robert (Herts W)

  Stanbrook, Ivor

  Jopling, Rt Hon Michael

  Stern, Michael

  Key, Robert

  Stradling Thomas, Sir John

  King, Roger (B'ham N'field)

  Sumberg, David

  Knight, Greg (Derby N)

  Taylor, John (Solihull)

  Knight, Dame Jill (Edgbaston)

  Thompson, Donald (Calder V)

  826

  Thompson, Patrick (N'ich N)

  Wells, Bowen (Hertford)

  Thorne, Neil (Ilford S)

  Whitfield, John

  Thurnham, Peter

  Wilkinson, John

  Townend, John (Bridlington)

  Winterton, Mrs Ann

  Trippier, David

  Winterton, Nicholas

  van Straubenzee, Sir W.

  Wolfson, Mark

  Viggers, Peter

  Wood, Timothy

  Waddington, David

  Yeo, Tim

  Wakeham, Rt Hon John

  Walden, George

  Tellers for the Noes:

  Waller, Gary

  Mr. Michael Neubert and Mr. Francis Maude.

  Wardle, C. (Bexhill)

  Watts, John

  Question accordingly negatived.
  Main Question put and agreed to.
  Resolved,
  That this House takes note of European Community Documents Nos. 6871/83, draft proposals for a Directive on the implementation of the principle of equal treatment of men and women in occupational social security schemes, 5825/1/84, draft Directive on the application of the principle of equal treatment for men and women in self employed occupations including agriculture and on protection during pregnancy and maternity, and 4118/86, communication from the Commission to the Council concerning a medium term Community programme (1986/90) on equal opportunities for women; and endorses the Government's commitment to the principle of equal treatment while seeking to ensure that unnecessary burdens are not imposed on business in the United Kingdom.

  Resolved,
  That Sir Richard Body be added to the Liaison Committee.—[Mr. Boscawen.]

  PRIVILEGES
  Resolved,
  That Mr. David Steel be discharged from the Committee of Privileges and Mr. A. J. Beith be added to the Committee.—[Mr. Boscawen]

  PETITIONS

    Social Security Reform
    11.42 pm
    Mr. Andrew Bowden (Brighton, Kempton): With your permission, Mr. Deputy Speaker, and that of the House, I wish to present a petition on behalf of about 1,000 people, most of whom live in Brighton.
    The petition states:
    That legislation based on the "Reform of Social Security—Programme for Action" White Paper would be extremely detrimental to the residents of the United Kingdom who are in receipt of social security benefits.
    Wherefore your petitioners pray that your Honourable House do not pass legislation arising out of the "Reform of Social Security" White Paper.
    And your petitioners, as in duty bound, will every pray.
    To lie upon the Table.
    11.44 pm
    Mr. Michael J. Martin: With your permission, Mr. Deputy Speaker, and that of the House, I wish to present a petition similar to that presented by the hon. Member for Brighton, Kemptown (Mr. Bowden) from the Springburn Elderly Forum about social security reform. The forum was formed recently and consists of senior citizens who are fighting to ensure that the pensioners' case is put properly to Parliament and to everyone who is responsible for their welfare. It gives elderly people the opportunity to discuss their problems.
    The petition has in excess of 2,000 signatures, and was organised by Mrs. Rose MacCallum of 85 Broomknowles road in my constituency. The petition is against the White Paper for the reform of social security, and states:
    "The Humble Petition of the Residents of the Constituency of Glasgow, Springburn Sheweth That the proposed changes in Social Security Benefits would be harmful to the people of this country.
    Wherefore your Petitioners pray that your Honourable House reject these proposals. And your Petitioners, as in duty bound will ever pray &c.
    To lie upon the Table.

  Board and Lodging Regulations (Midlothian)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boscawen.]
  11.45 pm
  Mr. Alex Eadie: The subject of the debate—the operation of the board and lodging regulations in Midlothian—is causing great anxiety in my constituency. It is fair to say that that anxiety is widespread throughout the country.
  The problem I face as a constituency Member for Parliament arises from statutory instrument No. 613, driven through the House by the Government's majority last year, entitled "Supplementary Benefit Regulations 1985". It is commonly referred to as board and lodging allowances, and I wish to discuss its effect on the elderly in 24-hour care in registered nursing homes.
  The problem with payments arose when the Government introduced new restrictions on DHSS payments. We were told that they were aimed at the so-called Costa del Dole—young people living in coastal towns. However, they also set a new limit of £170 a week on payment of nursing home fees.
  Even on the later aspect, it is claimed that the order is defective. It is not a new experience for this Government to find their orders defective. Indeed, they have been brought before the courts to be told so.
  The bitter experience that I shall relate to the House should give the Minister and his Government great cause for concern. The Minister is aware of the case that I shall describe at this late hour, and the time available compels me to do so in shorthand. It concerns a woman of 95, Mrs. Agnes Scott, formerly resident in Parthhead, Midlothian, but now resident in a nursing home. She is severely disabled and confined to a wheelchair. The medical evidence describes her as frail, suffering from dementia and osteoarthritis, and says that she requires full-dine nursing care. I hope that the Minister will at least have the grace to agree with those medical facts.
  I must pay the highest compliment to Mrs. Agnes Scott's grandson, Mr. H. Leonard Scott, who has campaigned for justice for his grandmother. I do so deliberately because he gives the lie to what is abroad nowadays—that children, or grandchildren, show lack of concern for their parents or grandparents. Mr. Scott has been a tower of strength to his mother, who is a pensioner and has been seriously ill. She is worried sick about what will happen to her 95-year-old mother. Lest there be any doubt about the role that she has played in looking after her mother, I want the record to show that for 16 years she cared for her mother until her own health broke down. Only reluctantly, under the pressure of medical advice, did she consent to her mother being cared for in a nursing home. Mrs. Agnes Scott's daughter was in no position to choose any particular establishment for her mother, because she herself had been hospitalised for eight months.
  The statutory instrument sets a limit of £170 a week on payments for nursing home fees for the elderly and disabled. I regret to say that I was given deplorable advice by the Minister in a letter. He wrote that charity should be asked to make up the shortfall between the limit and the fees. That was his response when I wrote him about the

  829
  case of 95-year-old Mrs. Agnes Scott, who has lived in Hilton Lodge nursing home since 1 October 1984. It is suitable for her needs and she is perfectly happy there. If she were removed on the ground of cost, the consequences would be fatal for her. The Minister has had a letter from me to tell him that his charity advice offers no solution to the problem.
  In the Minister's letter of 8 April he asserted that Mrs. Scott is in the nursing home that charges the highest fees. My response demonstrates that that is not true. He has been given the figures and I hope that he will concede that the information given in his letter of 8 April is misinformation.
  The feature that bedevils Mrs. Agnes Scott's case is that she has a decision in her favour arising from a tribunal decision of 21 February 1986. I shall quote the judgment in its totality because it has a bearing on what I want to say about the regulations. The judgment reads:
  "The Tribunal considered Regulation 9 of the Requirement Regulations and Schedule 1(A) and 2f which gives the figure of £138·60 per week ie the prescribed rate. This prescribed rate is now £170 a week as Mrs. Scott was paying £190 a week prior to 29.4.85 This became the protected rate. The majority held the view that it was her tenancy in the suitable nursing home which was protected and this would take into account any reasonable weekly increase, and in this case the weekly increase of £9·50 a week was reasonable in that it was less than the rate of inflation this was what 'protected' meant in the meaning of the Act and word."
  To give a fair picture, I should add that the dissenting member held that the tribunal had to take account of what the Act said, not what the tribunal thought that it intended to say. He maintained that the £190 per week was protected, not any subsequent weekly increase, however resonable.
  There is no decision in regard to inflation, which reveals the defectiveness of the Act. The adjudication officer has challenged the legality of the tribunal's finding and is appealing to the social security commissioners. The tribunal's decision is frozen, and poor Mrs. Scott and her relatives are left to sweat it out.
  Many of my constituents are puzzled. They believe that Parliament makes the laws and that, if a law is defective or in doubt. Parliament hastens to clarify it. If I had more time, I could give examples of defective unfair and unjust legislation that Parliament has remedied. When the statutory instrument was debated in November 1984—it was imposed in April 1985—the Secretary of State for Social Services gave the House the assurance that there was no question of elderly handicapped or disabled people being moved out of their existing accommodation and that their position would be protected.
  The Under-Secretary of State for Health and Social Security, the hon. Member for Wycombe (Mr. Whitney), was asked in a radio interview last July whether the limits were not putting on families the onus of paying for nursing homes. He replied:
  "We are definitely not. People are saying that because they are misinformed."
  The 95-year-old lady has a daughter who is herself on a pension. She cannot maintain her mother. At great personal sacrifice, she has attempted to buy her mother what can be called the basic necessities.
  The statements that I have quoted do not tally with the history of the case. Ministers must be held accountable for what they say. It is a serious matter if they have deceived
  830
  Parliament. The Minister has some explaining to do, although other Ministers should be at the Dispatch Box to explain.
  Real compassion for 95-year-old Mrs. Agnes Scott is alive in my constituency, but there is also anger that the Government do not seem to match it. Her grandson asked me whether his grandmother would be murdered by a parliamentay statutory instrument, because that was what it would mean if she were moved from Hilton Lodge. I could not answer the question. Can the Minister answer it tonight? The answer is anxiously awaited by the Scott family, by many other elderly people throughout Scotland and by Age Concern Scotland which reads our proceedings on behalf of its many elderly citizens.
  12 midnight
  The Parliamentary Under-Secretary for Health and Social Security (Mr. John Major): I must say immediately that compassion does not merely rest in Midlothian or, indeed, on the Opposition Benches, although I appreciate that the hon. Member for Midlothian (Mr. Eadie) did not suggest that. The welfare of the elderly and the disadvantaged are matters of concern to us all, and I shall seek to deal with the issue.
  I am exceedingly familiar with the case from which the hon. Gentleman drew a great deal of his text. He will know that the tribunal judgment is at present the subject of an appeal, and it would be unwise and improper for me to trespass on that matter. I appreciate that the charges relating to other homes are a relatively minor matter, but the hon. Gentleman has slightly incomplete information, and he may find that, for that innocent reason, he has been misled.
  The hon. Gentleman will know that it has long been an established practice under both Governments that the details of individual cases of this nature tend not to be discussed on the Floor of the House. However. I am perfectly happy to meet him privately at any time to discuss the matter. He has only to ask for us to have a conversation about the particular details of Mrs. Scott. I make that offer now, as I would have done previously, had he approached me requesting such a meeting at any time in the past.
  Mr. Eadie: The Minister should not deceive the House with that offer. I will accept any offer from a Minister to meet and discuss any case. He should be fair to the House and admit that I received an answer to my letter only when I tabled a question asking when I would receive a reply. That does not show any sense of urgency or co-operation on the part of the Minister.
  Mr. Major: If the hon. Gentleman wishes to be contentious, I am prepared to meet him. I was endeavouring to make him a realistic, civilised offer because I am not prepared to swap the details of a lady's particular difficulties across the Floor of the House. That would be neither proper nor appropriate and I will not do it, whatever the provocation may be. I am prepared to discuss the matter with the hon. Gentleman, and that was the point that I was making to him.
  I must commiserate with the hon. Gentleman about the timing of the debate. As the collective House is aware, although the hon. Gentleman did not mention it this evening, we have been reviewing the supplementary benefit limits for all forms of board and lodging, including

  831
  those for people in homes and hostels. We shall shortly be announcing the outcome of that review, and obviously, I cannot anticipate it. I must confine my remarks to the present arrangements, although I am acutely aware of the difficulties facing some elderly people, and we have paid special attention to them. I hope that the hon. Gentleman will accept that.
  It may be helpful to put the matter in a proper context if I remind the house briefly of the background to the changes we made last year. That was noticably absent from the hon. Gentleman's remarks. Our changes had three aims in respect of both ordinary board and lodgings, to which there was a passing reference, and residential and nursing homes in Lothian and elselwhere.
  The first of those aims was to gain control of very rapidly escalating expenditure. I shall return to that point later. The second was to target expenditure more precisely on those in real need, and the third was to help to curb undoubted abuse in some—although. of course, not all—areas. We were also concerned that, with the easy availability of high boarder payments, the benefit system was, in effect, acting as an artificial stimulus to the market, resulting in some cases of exploitation and waste. I emphasise "some", because I am not making a more general charge. It is not a matter of dispute between us that that was a genuine problem—[Interruption.] The hon. Gentleman had a great deal to say earlier. He might do me the courtesy of listening in the time remaining, so that he cannot at some later stage say that I did not respond to his points.
  The hon. Gentleman expressed concern about people in homes. That has to be seen in the context of the Government's very good record in recent years. Since the Conservative party took office in 1979 we have enabled many thousands more people to opt for the residential care of their choice, and that is continuing. The hon. Gentleman talked of compassion, but a sharp contrast can be drawn between us and the Labour Government. He did not mention the fact that, under that Government, supplementary benefit was only rarely sufficient to meet the charges incurred by elderly people in homes. I fear that he overlooked that point.
  The 1979 supplementary benefits handbook explained just how little could be paid then. Local limits were set by reference to
  "the highest charge a short-term claimant might be obliged to pay to find full board and lodging in commercial establishments of a reasonable standard".
  In other words, the amounts payable were geared to short-term unemployed claimants, not to the needs of the elderly and the disabled. There has been a material change in that respect.
  People in need of residential or nursing care had very little choice at that time. Those who could not pay privately had to rely on local authorities to provide accommodation, or they filled the long-stay wards of National Health Service hospitals. The hon. Gentleman will appreciate that in many cases hard-pressed families felt that they had to cope as best they could in difficult circumstances. I am not tonight arguing that the present system is perfect in all respects. Clearly there are difficulties with it. But, with all its difficulties, the present system is infinitely better than that. That point must be made so that people view policy in the round.
  The Government changed the benefit rules so as to open up the option of care in the independent sector. That
  832
  should be remembered, as it is important to many people in this country. The figures speak for themselves. In 1978, 7,000 supplementary benefit claimants were assisted with their fees in residential care and nursing homes. By 1984, the estimated figure was a six-fold increase, to 42,000. Expenditure has gone up even more. In 1978, £6 million was spent in that area; by 1983 expenditure had reached £105 million and by 1984 it was estimated to be £190 million. That was a quite staggering increase, but it was justifiable, and I hope that 'the hon. Gentleman welcomed it.
  It has never been the Government's intention to supplant the valuable role of local or health authorities in this area. Indeed, we are discussing with them how collaboration can be improved. There are grey areas of difficulty between their role and the role of supplementary benefit. I regret, although I understand the point, that a number of authorities took the increases in benefit entitlement as a cue to cease sponsoring claimants in residential care. Nationally, the number of people sponsored by local authorities in private and voluntary homes has been declining although the numbers in homes have tended to increase.
  That picture is mirrored in Lothian. In 1980, there were 544 people sponsored in the Lothian area. By 1985, that figure had fallen to 427. I understand that this trend is likely to increase in future. I should reiterate that local authorities still retain their rights and responsibilities in this area—[Interruption.] The hon. Gentleman is always trying to make political points. The situation is precisely the same in many areas in which the Labour party is in control, and he should acknowledge that.
  Mr. Harry Ewing: Give us the figures.
  Mr. Major: The hon. Gentleman will get the figures if he tables a question. We are discussing Lothian, and nominally at least, the hon. Gentleman is not, as far as I am aware, part of the debate. If he so wished, he could have indicated in the normal way that he wanted to take part in the debate. From the way in which the hon. Gentleman has intervened, it is becoming apparent that the debate has as much to do with party politics as with anything else.
  Mr. Eadie: On a point of Order, Mr. Deputy Speaker. I resent the fact that the Minister, in an Adjournment debate granted to an hon. Member, has acted in such an arrogant manner. He has been given 14 minutes out of 30 minutes to reply to the debate. Let us have a little less arrogance.
  Mr. Deputy Speaker (Sir Paul Dean): Order. That is not a point of order, as the hon. Member knows.
  Mr. Major: It certainly was not a point of order. It was one of the most ludicrous interventions that I have heard in my few years as a Member of the House. I assume that the hon. Gentleman would like an answer, although there seems to be some question about that.
  Mr. Eadie: The hon. Gentleman had 14 minutes in which to reply.
  Mr. Major: It is a jolly sight less, with the interruptions and mutterings from the hon. Member for Midlothian and his Front Bench colleague, the hon. Member for Falkirk, East (Mr. Ewing). One begins to wonder whether the hon. Gentleman wants a reply.

  833
  Although the changes in the supplementary benefit rules since 1980 brought many advantages, the system did not always work fairly. For example, the amount of supplementary benefit for people in residential care homes varied substantially from place to place—from £51 to £215 a week. Nursing home limits, which, admittedly, were more relevant to Mrs. Scott, varied between £80 and £295 a week. Because limits were set locally by adjudication officers by reference to charges actually levied, they were susceptible to manipulation by the more unscrupulous proprietors. Excessive profits were made at the taxpayer's expense, and value for money was not always given. In other circumstances, the hon. Gentleman would have been the first person to criticise that trend, although he has offered precious little support to the Government in trying to curb it.
  No responsible Government could ignore such problems, and last year we took steps to deal with them. We replaced the old local limits with a new, more consistent structure of national limits which varied according to the category of home—for elderly people, those who were handicapped, and so on. The limits operated in progressive steps to meet the anticipated cost of providing an appropriate level of care. The new limits were specifically intended to allow reasonable charges to be met in homes satisfying the registration requirements. Last November, we increased those limits by £10 for residential care homes and by a substantial £31·40 for nursing homes. That was another material fact that slipped the hon. Gentleman's mind when he addressed the House earlier.
  The limits for residential care homes now range from £120 to £180 a week. While the limits for nursing homes range from £170—as the hon. Gentleman mentioned—to £230 a week. Those new limits were substantially higher than those they superseded in some places and for a large number of people. In other cases, they were lower. The hon. Gentleman expressed concern about the position of people already in homes charging above the current limit when the changes were made. For those people. we provided unprecedentedly extensive transitional arrangements, which were described not by Ministers but by the Social Security Advisory Committee as generous. People
  834
  over pension age had their existing level of benefit protected until such time as payment under the new rules became more favourable to them.
  That was the extent and nature of transitional protection. It was precisely on all fours with the nature of transitional protection at all times since we have had a social security system—whatever party has been in power. There is nothing novel about the way that transitional protection worked. People under pension age were protected for a year until April 1986 to give them time to make alternative arrangements. There was provision to extend the protected period where exceptional hardship would otherwise result.
  In keeping with all precedents under Governments of both parties no provision was made to increase the transitionally protected amounts to meet fresh increases in fees. The hon. Gentleman suggested that that was harsh but, as I said a moment ago, it is not my intention to discuss Mrs. Scott's case across the Floor of the House. In the moments left to me, I reiterate, although I wanted to say much more, that I will be happy to meet the hon. Gentleman to discuss the case and the wider application of the board and lodging rules, if he so wishes. That is an open offer to him.
  I should like to say that the Government's intention, in their care for the elderly and the disabled, was to make the transitional protection provision as generous and as flexible as possible. I know that Mrs. Scott's grandson felt differently, but people do retain the same level of protection if they move to another home, although no one can receive more than the actual charge that they are required to pay. The logic of the hon. Gentleman's position can only be that any fees that proprietors choose to impose should be met, whatever their level. I am pleased to put it on record that the hon. Member for Falkirk, East shakes his head. [Interruption.] I did not say that the hon. Member for Midlothian said that. That is the logic of what he said. I am pleased to have it on record that it is not the Labour party's policy that any fee increase of any sort should be met.. That is an important—
  The Question having been proposed after Ten o'clock on Wednesday evening and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at fifteen minutes past Twelve o'clock.